What happened
Shares of hotel chain Marriott International, Inc. (MAR -0.87%) jumped as much as 13.7% in trading Wednesday after getting an analyst upgrade and seeing the market move to a more optimistic tune on the economy in 2020. Shares were volatile in trading, but at 2:45 p.m. EDT were still up 8.8% on the day.
So what
Yesterday, Wells Fargo analyst Dori Kesten upgraded Marriott's shares to overweight and put an $85 price target on the stock. Ironically, shares nearly hit that target today, but the improved rating is what the market often reacts to.
The market has also been more optimistic today, with the S&P 500 up 3.1%. As one of the stocks hit hardest by the COVID-19 pandemic, it's no surprise Marriott is leading the recovery.
Image source: Getty Images.
In the last couple of days, there were some positive developments in the travel and hospitality industry. Carnival Corp (CCL 1.13%) has raised over $6 billion and Saudi Arabia has taken an 8.2% stake in the company. Meanwhile, Wynn Resorts (WYNN -0.47%) raised $600 million in a debt offering, up from an initially announced $350 million offering. The implication is that capital markets are open to travel and hospitality companies if they need to raise money, which Marriott may eventually need to do.
Now what
I would chalk today's move up to the ups and downs of the market as it tries to navigate COVID-19 and the long-term implications for business. But the company has a long way to go before operations are restored to any level of "normal." Don't be surprised if more volatility is ahead and that may mean a move lower for the stock if consumer discretionary and travel spending plunges, even when the economy opens up again.
