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Marriott International, Inc. (MAR) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Marriott International, Inc. (MAR)

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Intrinsic Value (DCF)

Current$325.79
→
Intrinsic$146.02
-55%
$80.62$146.02$276.11
Market implies 34% growth for 5 years
Current price reflects execution expectations above 17% growth — not unreasonable for quality businesses.
At $326, the market prices in continued strong cash flow growth (34%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $81 → Bull $276. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →13%15%17%19%
8%$195$216$239$263
10%$117$131$146$162
12%$76$86$97$109
14%$50$58$67$76

Bull Case

  • Bull case ($276) with 20% growth, 8% discount rate

Bear Case

  • Bear case ($81) implies 75% downside at 14% growth, 12% discount
  • Price reflects 34% growth expectations vs 17% historical — high bar to clear
  • Trading 55% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$2.34B
Year 2$2.74B
Year 3$3.21B
Year 4$3.75B
Year 5$4.39B
Terminal$69.62B

📐 Model Inputs

Growth Rate17.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.00BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is MAR stock undervalued or overvalued?
🔴 OVERVALUED

MAR trades at $325.79 vs. our DCF-derived intrinsic value of $146.02, implying -55% downside. Using a 9.5% WACC and 17.1% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($246.52) suggests limited upside.

What is MAR's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.00B, projected at 17.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $14.85B net debt and dividing by 0.29B shares: Bear $78.50 | Base $146.02 | Bull $246.52. Current price $325.79 implies -55% to base case.

How is MAR's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($56.49B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 28.3x.