Marriott International, Inc.MARNASDAQ

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $188.03 per share(market-calibrated)

-47.8%

Upside to Fair Value

Current

$359.94

Pure Model

$130.73

Fair Value

$188.03

Bull Case

$150.96

Bear Case

$108.27

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

Unreachable

Calibrated Growth

75/25 blend

Market price implies assumptions beyond model range. Fair value blends 75% model / 25% market price.

What's Driving This Ratingfor MAR

✓

CapEx already efficient

CapEx at 1.77% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 6.67% in Year 1 to -9.05% by Year 5 (per analyst consensus). That's below the 3.00% terminal rate, so growth re-accelerates in Years 6-10 — a generous assumption. This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $104.97/share (19.0x terminal FCF) while exit multiple gives $156.49/share (29.9x terminal FCF). The 20x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.00% growth is more conservative. The base case averages both methods.

⚠

Market price exceeds model's maximum

Even with the most optimistic terminal growth the model allows, it can't reach $359.94. The market is pricing in factors beyond the DCF framework — possibly optionality, brand premium, or expectations of margin/growth inflection not yet in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 66.82% indicates efficient cash generation. FCF reaches $2.8B by Year 10 (11.35% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.10

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.45%

Cost of Debt

Pre-tax Cost of Debt3.39%

Tax Rate23.36%

After-tax Cost of Debt2.59%

Equity Weight (E/V)84.98%

Debt Weight (D/V)15.02%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (84.98% × 9.45%) + (15.02% × 2.59%)

= 8.42%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$27.9B	$29.9B	$27.5B	$24.6B	$25.0B
EBIT	$4.3B	$4.6B	$4.2B	$3.8B	$3.8B
Tax	$998M	$1.1B	$982M	$878M	$893M
NOPAT	$3.3B	$3.5B	$3.2B	$2.9B	$2.9B
+ Depreciation	$474M	$507M	$467M	$417M	$424M
- Capex	$495M	$530M	$487M	$436M	$443M
- Δ NWC	$175M	$52M	-$274M	-$109M	$73M
Free Cash Flow	$3.1B	$3.4B	$3.5B	$3.0B	$2.8B
Discount Factor	0.922	0.785	0.667	0.568	0.445
Present Value	$2.8B	$2.7B	$2.3B	$1.7B	$1.3B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.8B

Terminal Growth Rate3.00%

WACC8.42%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$53.9B

PV of Terminal Value$24.0B

Exit Multiple Method

Year 10 EBITDA$4.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$85.0B

PV of Terminal Value$37.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$20.9B

PV of Terminal Value$24.0B

Enterprise Value$44.9B

(-) Net Debt$16.7B

Equity Value$28.2B

Shares Outstanding269M

Price per Share$104.97

Exit Multiple Method

PV of Projected FCFs$20.9B

PV of Terminal Value$37.8B

Enterprise Value$58.7B

(-) Net Debt$16.7B

Equity Value$42.0B

Shares Outstanding269M

Price per Share$156.49

Pure Model Fair Value

$130.73

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
6.42%	$173.07	$181.77	$193.00	$208.07	$229.35
7.42%	$144.93	$150.13	$156.49	$164.48	$174.81
8.42%	$123.40	$126.76	$130.73	$135.51	$141.36
9.42%	$106.08	$108.37	$111.01	$114.09	$117.75
10.42%	$91.66	$93.29	$95.13	$97.23	$99.67

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$108.27

-69.9% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.38

Base Case

$130.73

-63.7% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.10

Bull Case

$150.96

-58.1% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.94

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.67%

Year 3 Revenue Growth1.78%

Year 5 Revenue Growth-9.05%

Year 7 Revenue Growth-4.23%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin15.29%

Terminal EBIT Margin15.81%

Tax Rate23.36%

Historical Capex / Rev1.77%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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