Intrinsic value of Marriott International - MAR

Previous Close

$133.05

  Intrinsic Value

$361.06

stock screener

  Rating & Target

str. buy

+171%

Previous close

$133.05

 
Intrinsic value

$361.06

 
Up/down potential

+171%

 
Rating

str. buy

We calculate the intrinsic value of MAR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 48.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  34.10
  31.19
  28.57
  26.21
  24.09
  22.18
  20.46
  18.92
  17.53
  16.27
  15.15
  14.13
  13.22
  12.40
  11.66
  10.99
  10.39
  9.85
  9.37
  8.93
  8.54
  8.18
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
Revenue, $m
  30,701
  40,276
  51,784
  65,358
  81,105
  99,097
  119,377
  141,961
  166,842
  193,993
  223,377
  254,944
  288,644
  324,427
  362,246
  402,062
  443,846
  487,578
  533,253
  580,878
  630,472
  682,071
  735,720
  791,481
  849,427
  909,644
  972,229
  1,037,292
  1,104,954
  1,175,347
Variable operating expenses, $m
  24,867
  32,062
  40,708
  50,907
  62,737
  76,255
  91,492
  108,460
  127,153
  147,553
  167,828
  191,546
  216,866
  243,750
  272,164
  302,079
  333,472
  366,329
  400,646
  436,428
  473,689
  512,456
  552,765
  594,659
  638,196
  683,438
  730,459
  779,343
  830,179
  883,067
Fixed operating expenses, $m
  1,606
  1,641
  1,677
  1,714
  1,752
  1,790
  1,830
  1,870
  1,911
  1,953
  1,996
  2,040
  2,085
  2,131
  2,177
  2,225
  2,274
  2,324
  2,375
  2,428
  2,481
  2,536
  2,591
  2,648
  2,707
  2,766
  2,827
  2,889
  2,953
  3,018
Total operating expenses, $m
  26,473
  33,703
  42,385
  52,621
  64,489
  78,045
  93,322
  110,330
  129,064
  149,506
  169,824
  193,586
  218,951
  245,881
  274,341
  304,304
  335,746
  368,653
  403,021
  438,856
  476,170
  514,992
  555,356
  597,307
  640,903
  686,204
  733,286
  782,232
  833,132
  886,085
Operating income, $m
  4,228
  6,574
  9,399
  12,738
  16,616
  21,052
  26,055
  31,631
  37,777
  44,487
  53,552
  61,359
  69,694
  78,547
  87,904
  97,758
  108,099
  118,924
  130,232
  142,022
  154,302
  167,079
  180,364
  194,174
  208,525
  223,440
  238,943
  255,060
  271,822
  289,262
EBITDA, $m
  8,645
  11,806
  15,612
  20,108
  25,327
  31,296
  38,027
  45,528
  53,794
  62,817
  72,584
  83,080
  94,287
  106,188
  118,768
  132,013
  145,915
  160,466
  175,665
  191,513
  208,018
  225,191
  243,048
  261,608
  280,896
  300,942
  321,776
  343,437
  365,964
  389,402
Interest expense (income), $m
  165
  445
  817
  1,273
  1,822
  2,469
  3,220
  4,077
  5,044
  6,121
  7,307
  8,602
  10,002
  11,507
  13,114
  14,820
  16,623
  18,521
  20,513
  22,598
  24,775
  27,046
  29,410
  31,870
  34,428
  37,086
  39,848
  42,719
  45,703
  48,805
  52,030
Earnings before tax, $m
  3,783
  5,757
  8,126
  10,916
  14,147
  17,832
  21,978
  26,587
  31,656
  37,180
  44,951
  51,356
  58,187
  65,433
  73,085
  81,135
  89,578
  98,412
  107,634
  117,247
  127,256
  137,669
  148,494
  159,746
  171,439
  183,592
  196,223
  209,357
  223,018
  237,232
Tax expense, $m
  1,021
  1,554
  2,194
  2,947
  3,820
  4,815
  5,934
  7,178
  8,547
  10,039
  12,137
  13,866
  15,710
  17,667
  19,733
  21,906
  24,186
  26,571
  29,061
  31,657
  34,359
  37,171
  40,093
  43,131
  46,289
  49,570
  52,980
  56,526
  60,215
  64,053
Net income, $m
  2,762
  4,203
  5,932
  7,969
  10,327
  13,017
  16,044
  19,409
  23,109
  27,142
  32,814
  37,490
  42,476
  47,766
  53,352
  59,229
  65,392
  71,840
  78,573
  85,590
  92,897
  100,498
  108,401
  116,615
  125,151
  134,022
  143,243
  152,831
  162,803
  173,179

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  32,114
  42,130
  54,167
  68,367
  84,838
  103,658
  124,871
  148,495
  174,521
  202,922
  233,658
  266,678
  301,929
  339,359
  378,919
  420,567
  464,274
  510,019
  557,796
  607,613
  659,490
  713,463
  769,582
  827,910
  888,522
  951,511
  1,016,976
  1,085,034
  1,155,810
  1,229,442
Adjusted assets (=assets-cash), $m
  32,114
  42,130
  54,167
  68,367
  84,838
  103,658
  124,871
  148,495
  174,521
  202,922
  233,658
  266,678
  301,929
  339,359
  378,919
  420,567
  464,274
  510,019
  557,796
  607,613
  659,490
  713,463
  769,582
  827,910
  888,522
  951,511
  1,016,976
  1,085,034
  1,155,810
  1,229,442
Revenue / Adjusted assets
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
  0.956
Average production assets, $m
  26,157
  34,316
  44,120
  55,685
  69,101
  84,430
  101,709
  120,951
  142,149
  165,282
  190,317
  217,212
  245,925
  276,412
  308,634
  342,557
  378,156
  415,416
  454,332
  494,908
  537,162
  581,124
  626,834
  674,342
  723,712
  775,017
  828,339
  883,773
  941,421
  1,001,396
Working capital, $m
  -1,044
  -1,369
  -1,761
  -2,222
  -2,758
  -3,369
  -4,059
  -4,827
  -5,673
  -6,596
  -7,595
  -8,668
  -9,814
  -11,031
  -12,316
  -13,670
  -15,091
  -16,578
  -18,131
  -19,750
  -21,436
  -23,190
  -25,014
  -26,910
  -28,881
  -30,928
  -33,056
  -35,268
  -37,568
  -39,962
Total debt, $m
  15,125
  23,579
  33,738
  45,722
  59,624
  75,508
  93,412
  113,350
  135,316
  159,287
  185,228
  213,097
  242,849
  274,440
  307,828
  342,980
  379,868
  418,477
  458,801
  500,846
  544,631
  590,184
  637,548
  686,777
  737,934
  791,096
  846,349
  903,790
  963,525
  1,025,670
Total liabilities, $m
  27,104
  35,558
  45,717
  57,701
  71,603
  87,487
  105,391
  125,329
  147,295
  171,266
  197,207
  225,076
  254,828
  286,419
  319,807
  354,959
  391,847
  430,456
  470,780
  512,825
  556,610
  602,163
  649,527
  698,756
  749,913
  803,075
  858,328
  915,769
  975,504
  1,037,649
Total equity, $m
  5,010
  6,572
  8,450
  10,665
  13,235
  16,171
  19,480
  23,165
  27,225
  31,656
  36,451
  41,602
  47,101
  52,940
  59,111
  65,608
  72,427
  79,563
  87,016
  94,788
  102,880
  111,300
  120,055
  129,154
  138,610
  148,436
  158,648
  169,265
  180,306
  191,793
Total liabilities and equity, $m
  32,114
  42,130
  54,167
  68,366
  84,838
  103,658
  124,871
  148,494
  174,520
  202,922
  233,658
  266,678
  301,929
  339,359
  378,918
  420,567
  464,274
  510,019
  557,796
  607,613
  659,490
  713,463
  769,582
  827,910
  888,523
  951,511
  1,016,976
  1,085,034
  1,155,810
  1,229,442
Debt-to-equity ratio
  3.020
  3.590
  3.990
  4.290
  4.510
  4.670
  4.800
  4.890
  4.970
  5.030
  5.080
  5.120
  5.160
  5.180
  5.210
  5.230
  5.240
  5.260
  5.270
  5.280
  5.290
  5.300
  5.310
  5.320
  5.320
  5.330
  5.330
  5.340
  5.340
  5.350
Adjusted equity ratio
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156
  0.156

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,762
  4,203
  5,932
  7,969
  10,327
  13,017
  16,044
  19,409
  23,109
  27,142
  32,814
  37,490
  42,476
  47,766
  53,352
  59,229
  65,392
  71,840
  78,573
  85,590
  92,897
  100,498
  108,401
  116,615
  125,151
  134,022
  143,243
  152,831
  162,803
  173,179
Depreciation, amort., depletion, $m
  4,417
  5,233
  6,213
  7,370
  8,711
  10,244
  11,972
  13,896
  16,016
  18,329
  19,032
  21,721
  24,593
  27,641
  30,863
  34,256
  37,816
  41,542
  45,433
  49,491
  53,716
  58,112
  62,683
  67,434
  72,371
  77,502
  82,834
  88,377
  94,142
  100,140
Funds from operations, $m
  7,178
  9,435
  12,145
  15,338
  19,039
  23,262
  28,016
  33,305
  39,125
  45,471
  51,846
  59,211
  67,069
  75,407
  84,215
  93,484
  103,208
  113,382
  124,006
  135,081
  146,613
  158,611
  171,084
  184,049
  197,522
  211,524
  226,077
  241,208
  256,945
  273,319
Change in working capital, $m
  -265
  -326
  -391
  -462
  -535
  -612
  -690
  -768
  -846
  -923
  -999
  -1,073
  -1,146
  -1,217
  -1,286
  -1,354
  -1,421
  -1,487
  -1,553
  -1,619
  -1,686
  -1,754
  -1,824
  -1,896
  -1,970
  -2,047
  -2,128
  -2,212
  -2,301
  -2,393
Cash from operations, $m
  7,444
  9,761
  12,536
  15,800
  19,574
  23,873
  28,705
  34,073
  39,971
  46,394
  52,845
  60,285
  68,215
  76,624
  85,501
  94,838
  104,629
  114,869
  125,559
  136,700
  148,300
  160,365
  172,908
  185,945
  199,492
  213,571
  228,205
  243,420
  259,245
  275,712
Maintenance CAPEX, $m
  -1,950
  -2,616
  -3,432
  -4,412
  -5,569
  -6,910
  -8,443
  -10,171
  -12,095
  -14,215
  -16,528
  -19,032
  -21,721
  -24,593
  -27,641
  -30,863
  -34,256
  -37,816
  -41,542
  -45,433
  -49,491
  -53,716
  -58,112
  -62,683
  -67,434
  -72,371
  -77,502
  -82,834
  -88,377
  -94,142
New CAPEX, $m
  -6,653
  -8,158
  -9,804
  -11,566
  -13,416
  -15,329
  -17,279
  -19,242
  -21,199
  -23,133
  -25,035
  -26,895
  -28,713
  -30,487
  -32,222
  -33,923
  -35,600
  -37,260
  -38,915
  -40,576
  -42,255
  -43,962
  -45,709
  -47,508
  -49,370
  -51,305
  -53,323
  -55,434
  -57,648
  -59,975
Cash from investing activities, $m
  -8,603
  -10,774
  -13,236
  -15,978
  -18,985
  -22,239
  -25,722
  -29,413
  -33,294
  -37,348
  -41,563
  -45,927
  -50,434
  -55,080
  -59,863
  -64,786
  -69,856
  -75,076
  -80,457
  -86,009
  -91,746
  -97,678
  -103,821
  -110,191
  -116,804
  -123,676
  -130,825
  -138,268
  -146,025
  -154,117
Free cash flow, $m
  -1,160
  -1,013
  -699
  -177
  590
  1,634
  2,984
  4,660
  6,678
  9,046
  11,282
  14,358
  17,781
  21,544
  25,638
  30,051
  34,773
  39,793
  45,102
  50,691
  56,554
  62,687
  69,086
  75,753
  82,688
  89,895
  97,381
  105,152
  113,220
  121,596
Issuance/(repayment) of debt, $m
  6,887
  8,454
  10,159
  11,984
  13,902
  15,884
  17,904
  19,938
  21,966
  23,971
  25,941
  27,869
  29,752
  31,591
  33,388
  35,151
  36,888
  38,609
  40,324
  42,045
  43,784
  45,553
  47,364
  49,228
  51,157
  53,162
  55,253
  57,441
  59,735
  62,146
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  6,887
  8,454
  10,159
  11,984
  13,902
  15,884
  17,904
  19,938
  21,966
  23,971
  25,941
  27,869
  29,752
  31,591
  33,388
  35,151
  36,888
  38,609
  40,324
  42,045
  43,784
  45,553
  47,364
  49,228
  51,157
  53,162
  55,253
  57,441
  59,735
  62,146
Total cash flow (excl. dividends), $m
  5,727
  7,441
  9,460
  11,807
  14,491
  17,518
  20,888
  24,598
  28,644
  33,017
  37,223
  42,227
  47,533
  53,135
  59,026
  65,203
  71,662
  78,402
  85,426
  92,736
  100,339
  108,240
  116,451
  124,981
  133,845
  143,057
  152,634
  162,593
  172,955
  183,741
Retained Cash Flow (-), $m
  -1,279
  -1,563
  -1,878
  -2,215
  -2,570
  -2,936
  -3,309
  -3,685
  -4,060
  -4,431
  -4,795
  -5,151
  -5,499
  -5,839
  -6,171
  -6,497
  -6,818
  -7,136
  -7,453
  -7,771
  -8,093
  -8,420
  -8,755
  -9,099
  -9,456
  -9,826
  -10,213
  -10,617
  -11,041
  -11,487
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  183
  246
  322
  414
  523
  649
  793
  955
  1,136
  1,335
  1,552
  1,787
  2,040
  2,309
  2,595
  2,898
  3,216
  3,551
  3,901
  4,266
  4,647
  5,044
  5,457
  5,886
  6,332
  6,795
  7,277
  7,778
  8,298
  8,840
Cash available for distribution, $m
  4,449
  5,878
  7,582
  9,592
  11,922
  14,582
  17,579
  20,913
  24,584
  28,586
  32,428
  37,075
  42,034
  47,296
  52,855
  58,706
  64,843
  71,266
  77,973
  84,965
  92,246
  99,820
  107,696
  115,882
  124,390
  133,231
  142,421
  151,976
  161,914
  172,255
Discount rate, %
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
  4,119
  5,002
  5,884
  6,730
  7,496
  8,137
  8,618
  8,909
  8,995
  8,873
  8,428
  7,957
  7,340
  6,615
  5,824
  5,008
  4,203
  3,442
  2,748
  2,138
  1,620
  1,193
  855
  594
  401
  262
  165
  101
  59
  34
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Marriott International, Inc. (Marriott International) is a lodging company. Marriott International operates in three business segments: North American Full-Service, North American Limited-Service and International. Its North American Full-Service segment includes its Luxury and Premium brands (JW Marriott, Marriott Hotels, Sheraton, Westin, Renaissance Hotels, Le Meridien, Autograph Collection Hotels, Delta Hotels, Gaylord Hotels, and Tribute Portfolio) located in the United States and Canada. Its North American Limited-Service segment includes Select brands (Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, Element Hotels and Moxy Hotels) located in the United States and Canada. Its International segment includes JW Marriott, St. Regis, EDITION, Bulgari Hotels & Resorts, Marriott Hotels, Sheraton, Westin, Four Points, Aloft Hotels, AC Hotels by Marriott, Protea Hotels, Element Hotels, and Moxy Hotels located outside the United States and Canada.

FINANCIAL RATIOS  of  Marriott International (MAR)

Valuation Ratios
P/E Ratio 65.9
Price to Sales 3
Price to Book 9.6
Price to Tangible Book
Price to Cash Flow 32.5
Price to Free Cash Flow 37.1
Growth Rates
Sales Growth Rate 17.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -34.8%
Cap. Spend. - 3 Yr. Gr. Rate -7.6%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 153%
Total Debt to Equity 158.8%
Interest Coverage 8
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 10.7%
Return On Total Capital 10.8%
Ret/ On T. Cap. - 3 Yr. Avg. 46.2%
Return On Equity 88.3%
Return On Equity - 3 Yr. Avg. 5.7%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 15.4%
Gross Margin - 3 Yr. Avg. 14.8%
EBITDA Margin 8.9%
EBITDA Margin - 3 Yr. Avg. 9.6%
Operating Margin 8%
Oper. Margin - 3 Yr. Avg. 8.6%
Pre-Tax Margin 6.9%
Pre-Tax Margin - 3 Yr. Avg. 7.8%
Net Profit Margin 4.6%
Net Profit Margin - 3 Yr. Avg. 5.3%
Effective Tax Rate 34.1%
Eff/ Tax Rate - 3 Yr. Avg. 32.2%
Payout Ratio 47.9%

MAR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MAR stock intrinsic value calculation we used $22894 million for the last fiscal year's total revenue generated by Marriott International. The default revenue input number comes from 2017 income statement of Marriott International. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MAR stock valuation model: a) initial revenue growth rate of 34.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8%, whose default value for MAR is calculated based on our internal credit rating of Marriott International, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Marriott International.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MAR stock the variable cost ratio is equal to 83%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1571 million in the base year in the intrinsic value calculation for MAR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Marriott International.

Corporate tax rate of 27% is the nominal tax rate for Marriott International. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MAR stock is equal to 0.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MAR are equal to 85.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Marriott International operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MAR is equal to -3.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3731 million for Marriott International - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 365 million for Marriott International is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Marriott International at the current share price and the inputted number of shares is $48.6 billion.

RELATED COMPANIES Price Int.Val. Rating
VAC Marriott Vacat 119.98 122.21  hold
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HLT Hilton Worldwi 81.96 132.77  str.buy
CHH Choice Hotels 79.05 19.04  str.sell
WYN Wyndham Worldw 108.44 56.34  sell
IHG InterContinent 65.38 10.51  str.sell
LQ La Quinta Hold 21.62 1.61  str.sell

COMPANY NEWS

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▶ Chicago-based travel software Journera raises $9 million   [09:54AM  American City Business Journals]
▶ [$$] Changes to Starwoods Popular Rewards Card Vex Travelers   [Jul-11-18 07:48PM  The Wall Street Journal]
▶ Stocks down, tension mounts over trade   [11:40AM  Yahoo Finance]
▶ Presidio Cos. planning Hilton hotel in West Sacramento   [10:08AM  American City Business Journals]
▶ Developer acquires land where uptown hotel is planned   [Jul-10-18 02:54PM  American City Business Journals]
▶ Check out all the hotels under construction in San Francisco   [Jul-09-18 03:47PM  American City Business Journals]
▶ [$$] Starwood Capital to Sell Swedish Portfolio to Hemfosa   [Jul-06-18 12:06PM  The Wall Street Journal]
▶ Downtown property sales show growing strength in submarket   [Jul-03-18 07:45PM  American City Business Journals]
▶ 5 tips for smartphone use while on vacation   [02:11PM  Yahoo Finance Video]
▶ Exclusive: W Hotel plans $50 million renovation   [Jul-02-18 02:32PM  American City Business Journals]
▶ Restaurants, opening revealed for luxury Gulch hotel   [08:05AM  American City Business Journals]
▶ W Hotels Strikes A Chord With Music City   [02:00PM  PR Newswire]
▶ Marriott, partners to buy Phoenix Sheraton Grand for $255 million   [12:22PM  American City Business Journals]
▶ What's behind Marriott's wild swings in employment numbers?   [Jun-26-18 05:24PM  American City Business Journals]
▶ Why Maryland was never going to lose Marriott   [03:14PM  American City Business Journals]
▶ First Look: JW Marriott gets major Hill Country makeover   [Jun-20-18 03:55PM  American City Business Journals]
▶ [$$] Supporting Taiwan through corporate unity   [07:00AM  Financial Times]
▶ Amazon's Alexa at Marriott hotels   [05:02AM  Reuters Videos]
▶ Amazon Alexa Embraced By Marriott For Use In Select Hotels   [04:08PM  Investor's Business Daily]
▶ Uptown hotel chosen for launch of new Amazon addition in rooms   [02:58PM  American City Business Journals]
▶ Amazon launches Alexa for Hospitality in Marriott hotels   [10:46AM  American City Business Journals]
▶ Le Meridien Chambers debuts its art-centric facelift (slideshow)   [06:43AM  American City Business Journals]
▶ 'Mixtress' Gina Chersevani in talks to open Shaw restaurant   [Jun-14-18 02:58PM  American City Business Journals]
▶ An Expert's View of Investing in the Sharing Economy   [Jun-13-18 07:02PM  Motley Fool]
▶ NIMBY North Beach residents want to crack down on new hotels   [04:09PM  American City Business Journals]
▶ U.S. Hotel Industry Outlook - June 2018   [Jun-11-18 03:48PM  Zacks]
▶ SOLD: Brown Palace Hotel fetches $125 million   [Jun-08-18 03:10PM  American City Business Journals]
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