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On Thursday, Marriott Vacations Worldwide (NYSE:VAC) maintained its Market Outperform rating and $115.00 price target from Citizens JMP. The firm’s analysts highlighted the company’s fourth quarter 2024 adjusted EBITDA of $185 million, which surpassed both Citizens’ and the consensus estimates of $174 million and $170 million, respectively. This performance was attributed to increased contract sales and a slight edge in EBITDA margin. According to InvestingPro data, the company’s trailing twelve-month EBITDA stands at $665 million, with a healthy gross profit margin of 56%.
Marriott Vacations also provided its initial guidance for the year 2024, suggesting a 4% growth in contract sales. This forecast reflects the company’s ability to sustain customer demand even amid economic challenges. Notably, the company announced an expansion of its EBITDA enhancement initiatives, projecting an increase of $100 million to $150 million. InvestingPro analysis shows the company has maintained dividend payments for 12 consecutive years, demonstrating consistent shareholder returns despite market volatility.
The analysts at Citizens JMP expressed optimism about the potential benefits of the EBITDA enhancement initiatives. They acknowledged the efforts and potential volatility involved in achieving these goals but recognized the provided upside to their long-term forecasts. The firm’s continued recommendation to invest in Marriott Vacations is based on the company’s highly sought-after, premium product offerings. InvestingPro data reveals analyst targets ranging from $78 to $142, with the stock currently trading below its Fair Value, suggesting potential upside opportunity. Subscribers can access 8 additional ProTips and comprehensive financial analysis in the Pro Research Report.
In other recent news, Marriott Vacations Worldwide reported its fourth-quarter 2024 earnings, surpassing analyst 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. Contract sales increased by 7% year-over-year, driven by a 9% rise in sales to first-time buyers. Despite a 1% decrease in adjusted EBITDA to $185 million, the company maintained strong liquidity and returned $163 million to shareholders through dividends and share repurchases.
Marriott Vacations announced plans for new developments, including a resort in Waikiki and a Marriott Vacation Club in Thailand. In terms of analyst ratings, Barclays (LON:BARC) maintained an Overweight rating on the company’s stock, highlighting positive trends and potential upside from business modernization efforts. However, Barclays also noted a challenge in the company’s credibility following a disappointing outlook. Mizuho (NYSE:MFG) Securities adjusted its price target for Marriott Vacations from $120 to $112 but maintained an Outperform rating, citing solid fundamentals despite unexpected challenges.
These recent developments indicate Marriott Vacations is navigating both opportunities and challenges in its financial trajectory. The company’s strategic initiatives and analyst assessments reflect a focus on long-term growth potential, even amidst current uncertainties.
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