Merrill Lynch upgraded Marriott (MAR) to buy from neutral.
Analyst David Anders thinks revenue per available room changes generally drive share prices. He expects Marriott's fee income to benefit from gradual improvement in RevPAR throughout 2004 as a result of the strengthening economy. He also thinks RevPAR will decline 1% in 2003, but increase 3% in 2004.
Anders says Marriott can likely achieve annual net room growth of 5%-6% over the next two years, given the company's solid development pipeline and high conversion rate as owners seek to pair up with dominant brands. He raised the $1.85 2003 earnings per share estimate to $1.90, and upped the $2.15 2004 estimate to $2.20. He set a $50 12-month target.