Marriott International (NASDAQ:MAR) looks to have been through the worst of the recent troubles with the travel sector. And they were significant. Since topping out at $148.36 in February, MAR stock dropped to a low of $52.65.
It’s just now starting to rebound and is still a solid “blood in the streets” opportunity. With patience, I strongly believe Marriott could refill its bearish gap around $148.
Marriott withdrew 2020 guidance in March and eliminated its cash dividend payments thanks to COVID-19.
“The company has not repurchased shares in 2020 other than the $150 million of share repurchases reported in the February 26, 2020 press release, and Marriott anticipates that its previously announced first-quarter 2020 dividend, payable on March 31, 2020, will be the last until conditions improve,” according to a statement by Marriott.
However, the hotel is seeing some signs of improvement in China. While occupancy rates are still under 15%, it’s an improvement and that trendlines are “pointing in the right direction.”
Wells Fargo analyst Dori Kesten also upgraded the MAR stock from an “equal weight” rating to “overweight” with a price target of $85 a share. 2022 estimates make Marriott more attractive than its peers, she added.
The Worst of the Coronavirus and MAR Stock
At the moment, the world is up to 1.5 million coronavirus cases, with 90,000 deaths.
Fortunately, there are some signs the worst of the worst may be behind us, and that the overall number of cases may begin to flatten out and fall.
If that’s the case, we could begin to see inklings of a recovery in most sectors, as life returns to some sort of normalcy. Right now, a number of countries are beginning to flatten the curve. In fact, according to the University of Washington’s Institute for Health Metrics and Evaluation (IHME), France, Germany, Greece, Ireland, Italy, Portugal, and Spain have begun to flatten the curve.
There’s also a hint of flattening in New York, where Gov. Andrew Cuomo said the number of daily recorded deaths has been “essentially flat” for the last few days. He added the numbers are “hopeful” the region is approaching the peak of infections.
The Bottom Line on Marriott International
While we may not return to “normal” any time soon, there are still some positive signs. And while I understand some investors are hesitant to buy beaten down travel stocks on what may be temporary optimism, we also can’t ignore the blood in the street opportunity.
As Baron Rothschild has taught us, “Buy when there’s blood in the streets, even if the blood is your own.” And as Sir John Templeton has said, “To get a bargain price, you’ve got to look for where the public is most frightened and pessimistic.”
With a good amount of patience, I strongly believe MAR stock can refill its gap around $148. In my opinion, it’s a strong buy and hold.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, he did not hold a position in any of the aforementioned securities.