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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its price target for Travel + Leisure Co. (NYSE: TNL), decreasing it slightly to $63.00 from the previous $64.00. Despite the reduction, the firm maintained a Neutral rating on the company’s shares. According to InvestingPro data, TNL currently trades at $43.05, with analyst targets ranging from $39 to $72, suggesting significant potential upside. The company maintains a perfect Piotroski Score of 9, indicating strong financial health. The move followed the announcement of Travel + Leisure’s first-quarter financial results, which included a consolidated EBITDA of $202 million, surpassing the Street’s expectation of $200 million. The company’s trailing twelve-month EBITDA stands at $875 million, while maintaining an attractive P/E ratio of 7.73x.
Travel + Leisure’s vacation ownership interval (VOI) trends were noted to be better than anticipated, supported by robust close rates. This performance was seen as a positive development, especially as the market had been prepared for potential value per guest (VPG) compression not only for Travel + Leisure but for the industry as a whole.
Mizuho acknowledged that while investors might express concerns over the company’s increased provisions, the overall results were considered compelling given the current macroeconomic backdrop and the stock’s valuation, which is close to its trough levels. The firm’s analysis suggested that the first quarter was more favorable than what was initially feared by the market.
The report also highlighted that forward trends, including close rates and provisions, appear to be stable or improving. This perspective, however, may not have been fully communicated during the company’s earnings call. Mizuho’s revised price target reflects this outlook while maintaining the Neutral stance on the stock, indicating a wait-and-see approach as the market digests the company’s recent performance and future potential. Notable strengths include a 5.2% dividend yield and a 19-year track record of consistent dividend payments. For deeper insights into TNL’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.
In other recent news, Travel + Leisure Co. reported its first-quarter 2025 earnings, showing a slight miss on earnings per share (EPS) but a positive revenue surprise. The company posted an EPS of $1.11, just under the $1.12 forecast, while revenue slightly exceeded expectations at $934 million against a $933.12 million forecast. The Vacation Ownership segment contributed significantly, with a 4% year-over-year revenue increase to $755 million and an 18% rise in Adjusted EBITDA to $159 million. However, the Travel and Membership segment faced challenges, experiencing a 7% decline in revenue and a 9% drop in Adjusted EBITDA. Travel + Leisure Co. continues to focus on innovation, with plans for new app launches and resort developments. Analyst firms such as Jefferies and Truist Securities have been closely following these developments, with discussions focusing on the company’s strategic direction. The company’s guidance for the upcoming quarters remains optimistic, with expectations of $245-255 million in Adjusted EBITDA for Q2 and full-year projections between $955-985 million.
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