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Marriott Still a “Buy” at Nomura, Despite Lackluster Q2 Results (MAR)

Hotel/resort operator Marriott International, Inc. ( MAR ) on Thursday caught some continued bullish support from analysts at Nomura Securities.

The firm maintained its "Buy" rating on MAR as well as its $43 price target, which suggests a 13% upside to the stock's Wednesday closing price of $38.03.

A Nomura analyst commented, " MAR reported an essentially in-line 2Q ($0.42) , with lower-than-expected fee income (~$15m) offset by higher owned/leased revenue (~$30m). The company did lift its 3Q (and 2012 EPS outlook by ~ 4% to $1.65- $1.75), but all of the increase is due to a $40m gain on the sale of its Courtyard joint venture interest. MAR did lower its fee revenue forecast by $15-$25m owing to weakness mainly in Asia and the Middle East (~15% of earnings). RevPAR in Europe of 2.6% is also likely to remain a headwind, although MAR had baked it into its previous forecasts. In our 2Q preview, our concern was that the global RevPAR strength seen in 1H12 could be repeated in 2H12. Weakness in the global economy is impacting MAR's ability to drive double-digit RevPAR in many of its international markets."

Marriott shares fell $1.40, or -3.7%, in premarket trading Thursday.

The Bottom Line

Shares of Marriott International ( MAR ) have a 1.37% dividend yield, based on last night's closing stock price of $38.03. The stock has technical support in the $34-$36 price area. If the shares can firm up, we see overhead resistance around the $40-$42 price levels.

Marriott International, Inc. ( MAR ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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