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On Wednesday, Barclays (LON:BARC) reiterated its Overweight rating on Marriott Vacations Worldwide (NYSE:VAC) shares, maintaining a $97.00 price target. The stock, currently trading at $72.90, has experienced significant pressure with a 16.76% decline over the past week. According to InvestingPro data, the RSI suggests the stock is in oversold territory. The firm’s analyst highlighted several key points from recent meetings, noting the positive trends in February and the potential for significant upside to the 2026 consensus expectations. The analyst also pointed out the real opportunities arising from the company’s ongoing business modernization program.
The positive aspects mentioned by the analyst include reassuring back-end trends observed in February, which suggest a stable performance. The company maintains solid fundamentals with a healthy current ratio of 3.34x and has consistently paid dividends for 12 consecutive years, currently offering a 4.5% yield. Additionally, there is a belief that by 2026, the company’s financial results could surpass current market expectations. This optimism is further bolstered by the potential benefits of Marriott Vacation’s business modernization efforts, which are expected to contribute to the company’s growth and efficiency.
Despite these encouraging signs, the analyst also acknowledged a major challenge facing the company. Following another disappointing outlook, Marriott Vacations’ credibility has been identified as a significant near-term headwind, aside from broader macroeconomic concerns. The analyst expressed a cautious stance, indicating that while there is an incremental bullish outlook on the multi-year risk/reward for the company’s shares, especially at current levels, a recovery in credibility and share price will likely depend on more concrete evidence of effective execution in the medium term.
Marriott Vacations Worldwide’s stock performance will be closely watched by investors as they look for signs of the company’s ability to navigate the outlined challenges and capitalize on the identified opportunities. The reiterated Overweight rating and $97.00 price target by Barclays reflect a belief in the company’s long-term potential, despite the near-term hurdles that need to be overcome. InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $78 to $142. For deeper insights into VAC’s valuation and 10+ additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Marriott Vacations Worldwide reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share of $1.86 compared to the forecasted $1.61. The company also exceeded revenue projections, reporting $1.33 billion against the anticipated $1.24 billion. Marriott Vacations Worldwide saw a 7% increase in contract sales, driven by a 9% rise in first-time buyer sales. Despite a slight 1% decrease in adjusted EBITDA to $185 million, the company maintained robust liquidity with over $900 million. The company announced new developments, including a new resort in Waikiki and plans for a Marriott Vacation Club in Thailand, highlighting its commitment to expansion.
In a separate analysis, Mizuho (NYSE:MFG) Securities adjusted its outlook on Marriott Vacations Worldwide, reducing the price target from $120 to $112 but maintaining an Outperform rating. This revision reflects unexpected challenges such as changes in rentals, compensation, and project spending, which create headwinds for 2025. Mizuho anticipates potential adjustments to 2026 forecasts due to a lack of visibility in the business. Despite these challenges, Marriott Vacations Worldwide continues to focus on modernization initiatives expected to contribute $15-$25 million in 2025, aiming for long-term growth.
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