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Mizan Nurani

Marriott: what the share price already assumes

A fee-driven DCF anchored to Marriott’s 2026 guidance, with scenarios, a reverse DCF and peer multiples. Every input traces back to a filing.

By Mizan Nurani

Data as of October 2, 2026

Built with Python, Excel, SEC XBRL, TypeScript

Excel model

Exhibit 1Most of Marriott’s revenue is not Marriott’s

Reported revenue, FY2025: $26.2bn

Cost reimbursements (pass-through)
73%
$19.2bn
Fees, net of contract amortization
20%
$5.3bn
Owned, leased and other
6%
$1.7bn

Source: Marriott 10-K filings (XBRL), Q2 2026 earnings release. Author’s calculations.

Exhibit 2The fee engine: gross fees by type

USD millions. 2026E is the midpoint of the company’s August 2026 guidance, which has no split by type.

  • Franchise fees
  • Base management fees
  • Incentive management fees
  • 2026E guidance

Source: Marriott 10-K filings (XBRL), Q2 2026 earnings release. Author’s calculations.

Why the model starts from fees

Marriott owns very few hotels. Owners build and own the buildings; Marriott runs them under a management contract or lends them a brand under a franchise. It is paid three kinds of fee: base management fees (a share of hotel revenue), incentive fees (a share of hotel profit above a hurdle) and franchise fees, which also include what banks pay for the co-branded credit cards. Franchise fees were 61% of gross fees in 2025.

The large reimbursement line (Exhibit 1) is hotel-level costs that Marriott pays and the owners repay, mainly for staff in managed hotels and the loyalty program. It nets to roughly zero over time and management excludes it from Adjusted EBITDA, so the model does too. What is left grows with two numbers: how many rooms are in the system (net unit growth) and how much each room earns (RevPAR, revenue per available room):

gfees≈(1+grooms)(1+gRevPAR)−1g_{\text{fees}} \approx (1 + g_{\text{rooms}})(1 + g_{\text{RevPAR}}) - 1

Gross fees fell from $3.8bn in 2019 to $1.7bn in 2020 and were back above the 2019 level by 2022 (Exhibit 2). That collapse is the risk in one bar: fees are a lever on travel demand.

Value per share

$230

−36.0% against $358.96 (October 2, 2026)

Enterprise value
$76.5bn
Net debt (Jun 30)
$16.5bn
Equity value
$60.0bn
Terminal value share
62%
EV / 2026E EBITDA
12.8x
Exit multiple implied
10.3x

The price implies fee growth of

14.0%

a year, 2027 to 2030, against 7.1% in this case

Or a cost of capital of

7.12%

against a CAPM WACC of 8.90%

Exhibit 3The cash flow build

USD millions. 2026E is company guidance (midpoints); only its fourth quarter falls after the valuation date.

Fiscal year2026E2027E2028E2029E2030E2031E2032E2033E2034E2035E
Gross fees6,0406,4706,9307,4237,9518,4518,9139,3279,6839,974
Growth11.1%7.1%7.1%7.1%7.1%6.3%5.5%4.6%3.8%3.0%
Owned, leased, net180185191197203209215221228235
G&A−885−912−939−967−996−1,026−1,057−1,088−1,121−1,155
Other EBITDA items6607077578118699239741,0191,0581,090
Adjusted EBITDA5,9956,4506,9397,4638,0268,5579,0459,4799,84810,144
Stock compensation−252−270−289−310−332−353−372−389−404−416
Cash taxes−1,337−1,439−1,550−1,668−1,795−1,915−2,024−2,122−2,205−2,271
Investment spending−1,300−1,165−1,247−1,336−1,431−1,470−1,497−1,511−1,511−1,496
Unlevered free cash flow3,1063,5773,8534,1504,4684,8195,1515,4575,7285,960
Discount factor0.9890.9380.8610.7910.7260.6670.6120.5620.5160.474
Present value7683,3553,3193,2823,2453,2143,1553,0692,9582,826

Terminal value $104.0bn at the end of 2035, worth $47.3bn today; explicit years $29.2bn.

Source: Marriott 10-K and 10-Q filings, Q2 2026 guidance, Yahoo Finance, FRED, Damodaran. Author’s calculations.

Exhibit 4What the price assumes

Value per share against gross fee growth in 2027 to 2030, other inputs as set. Where the line crosses the price is the growth the market is paying for.

  • Value per share
  • Share price

Source: Marriott 10-K and 10-Q filings, Q2 2026 guidance, Yahoo Finance, FRED, Damodaran. Author’s calculations.

Exhibit 5Sensitivity to the discount rate and terminal growth

Value per share. Cobalt above the $359 price, red below; the outlined cell is the current case.

Discount rate / Terminal growthg 2.0%g 2.5%g 3.0%g 3.5%g 4.0%
WACC 7.90%$249$268$291$319$354
WACC 8.40%$223$239$257$279$307
WACC 8.90%$202$215$230$247$269
WACC 9.40%$183$194$206$221$238
WACC 9.90%$167$176$186$198$212

Source: Marriott 10-K and 10-Q filings, Q2 2026 guidance, Yahoo Finance, FRED, Damodaran. Author’s calculations.

Exhibit 6Valuation ranges against the price

Per share. Dots mark the central estimate of each method.

Source: Marriott 10-K and 10-Q filings, Q2 2026 guidance, Yahoo Finance, FRED, Damodaran. Author’s calculations.

Exhibit 7Peer multiples

Enterprise value over each company’s own 2026 Adjusted EBITDA guidance (midpoint)

CompanyPriceMarket capNet debt2026E EBITDAEV / EBITDA
Marriott International MAR$358.96$93.6bn$16.5bn$6.0bn18.4x
Hilton Worldwide HLT$319.36$71.9bn$12.3bn$4.1bn20.7x
Hyatt Hotels H$158.90$15.0bn$3.7bn$1.2bn15.9x
Wyndham Hotels & Resorts WH$71.79$5.3bn$2.6bn$740m10.7x
Choice Hotels International CHH$102.50$4.6bn$2.0bn$643m10.2x

Peer median 13.3x (interquartile 10.6x to 17.1x). At the median, Marriott would be worth $242 a share; at Hilton’s 20.7x, $413.

Source: company Q2 2026 earnings releases and 10-Q filings, Yahoo Finance (prices on Oct 2, 2026). Author’s calculations.

The build

FY2026 is the company’s own guidance from August 3, 2026, taken at the midpoints: gross fees of $6.0bn, Adjusted EBITDA of $6.0bn and investment spending of $1.3bn. From 2027 fees grow with rooms and RevPAR for four years, then fade in a straight line to the terminal growth rate by 2035. G&A grows on its own path, which is where operating leverage comes from. The remaining Adjusted EBITDA items (joint-venture EBITDA and add-backs) keep their 2026 share of fees.

UFCFy=EBITDAy−SBCy−τ (EBITDAy−SBCy−D&Ay)−Investmenty\text{UFCF}_y = \text{EBITDA}_y - \text{SBC}_y - \tau\,(\text{EBITDA}_y - \text{SBC}_y - \text{D\&A}_y) - \text{Investment}_y

Stock compensation is treated as a cash cost, because Adjusted EBITDA adds it back and shareholders pay for it through dilution. Investment spending covers key money paid to win contracts, technology and loans to owners: the cost of the unit growth the model assumes. Cash flows are discounted at mid-year from a September 30, 2026 valuation date, with only the last quarter of 2026 included, and the terminal value is a growing perpetuity:

TV2035=UFCF2035 (1+g)WACC−gTV_{2035} = \frac{\text{UFCF}_{2035}\,(1+g)}{\text{WACC} - g}

The discount rate

The cost of equity uses the 10-year Treasury yield (5.24% on October 1, 2026, FRED), a beta of 1.11 (60 monthly returns against the S&P 500, Blume-adjusted from 1.17) and an equity risk premium of 4.09%. The cost of debt is guided 2026 interest expense over average debt, after tax at the guided 26.25%. Weighting at market value gives 8.90%.

Two things make this rate high. The 10-year yield rose from 4.12% on October 1, 2025 to 5.24%, with the largest monthly rise in September 2026. And a beta above one is honest for a business whose fees fell by more than half in 2020.

What the price assumes

A DCF that lands far from the market is a question, not an answer. Exhibit 4 turns the model around: to justify $359, gross fees would have to grow by 14.0% a year from 2027 to 2030, against 7.1% from rooms and RevPAR, or investors would have to accept a 7.1% return on a beta-1.1 stock while Treasuries yield 5.2%. Neither is impossible: the new credit card agreements lift fees in 2027, and asset-light compounders have traded at bond-like discount rates for years. But both leave little room for a RevPAR downturn.

The peer table points the same way with a caveat. Marriott at 18.4x 2026E EBITDA sits above the median but below Hilton, the closest comparable. The midscale franchisors (Wyndham, Choice) trade near 10x and drag the median down, so the peer range is wide (Exhibits 6 and 7).

What would change the view

  • Upside: faster conversions lifting net unit growth toward 6%, the full-year effect of the new US co-brand credit card terms, and lower long-term rates.
  • Downside: a RevPAR recession (2020 is the stress case), further weakness in the Middle East and China, competition for owners that raises key money, and leverage near three times EBITDA that funds the buybacks.

Limits

  • Guidance midpoints anchor 2026; the model does not forecast quarters or the timing of the credit card uplift.
  • Working capital is assumed flat and reimbursement timing is ignored. Net debt is from the June 30, 2026 balance sheet, the latest filed, and leases are left out on both sides because EBITDA is after rent.
  • Peer multiples use each company’s own Adjusted EBITDA definition, which differ at the edges (Hyatt includes asset sales in progress).
  • The bear and bull cases move several inputs at once; the Excel model lets you move them one at a time with every formula visible.

Sources

This is a study, not a recommendation. Market data as of October 2, 2026. Valuation inputs other than market prices are as reported or guided by the companies.