Hotel operatorMarriott International ( MAR ) has risen more than 30% in the past year, easily outperforming the S&P 500. And at least one brokerage sees more upside.
SunTrust Robinson Humphrey upgraded Marriott from neutral to buy Wednesday with a target of 45, a premium of about 16% to the current share price.
Marriott has recovered from the 2008-09 recession, fueled mainly by a rebound in U.S. corporate travel that has pushed up occupancy rates and room prices. The company operates hotels in more than 70 countries, but most of its revenue still comes from North America.
Profit for the third quarter jumped a better-than-expected 52% from a year ago, the biggest increase in at least four years. Profit for the full year is expected to climb 24%.
Marriott's earnings have been steady over the past three years, judging from its earnings stability factor of 3 on a scale of 0 to 99, with 0 being most stable.
Marriott, which operates Courtyard, Renaissance, Ritz-Carlton and Fairfield hotels as well as those under its own name, has boosted its quarterly dividend after slashing it during the economic slump. The quarterly payout is up nearly 50% since early 2011 to 0.13, which amounts to an annual dividend yield of 1.3%, below the S&P 500 average of 2.1%.
The stock has been building the right side of a base after a failed breakout. The left side of the base shows nine straight down weeks, including five in above-average volume.
But it's climbed back into the upper half of its long-term trading range, a good sign, and it's in striking distance of its 52-week high.
Yet Marriott's Leisure-Lodging industry group remains weak at No. 103 out of the 197 groups that IBD tracks. The Leisure sector is also weak.
Marriott's revenue growth has slowed for three straight quarters after the company spun off its time-share unit,Marriott Vacations World ( VAC ), in November 2011.
Shares of time-share companies have rebounded sharply after taking a beating during the recession. Marriott Vacations and resort operatorWyndham Worldwide ( WYN ) both hit new highs intraday Wednesday.