Mizuho raises Hilton Grand Vacations target to $60, keeps Outperform

On Friday, Mizuho (NYSE:MFG) Securities maintained its positive stance on Hilton Grand Vacations (NYSE:HGV) shares, as analyst Ben Chaiken increased the company’s price target to $60 from $55. The Outperform rating was reaffirmed, highlighting Hilton Grand Vacations’ performance in the fourth quarter, which surpassed expectations. The company, currently valued at $4.2 billion, maintains a "GOOD" financial health score according to InvestingPro analysis, with liquid assets significantly exceeding short-term obligations.

Chaiken’s analysis pointed out the successful conversion of Bluegreen sales centers ahead of schedule, completed in November 2024 instead of the third quarter of 2025. This accelerated transition allows Hilton Grand Vacations to offer its HGV max program to Bluegreen’s customer base, a demographic previously considered underserved. The HGV max program offers a broader system that is proving to be attractive to customers, contributing to the company’s impressive 38.7% revenue growth over the last twelve months. For deeper insights into HGV’s growth metrics and future potential, consider exploring the comprehensive Pro Research Report available on InvestingPro.

The report emphasized an arbitrage opportunity that is expected to continue driving the Vacation Point Gallery (VPG) higher than anticipated. Customers who invest in a new full week also have the chance to convert their legacy ownership at nearly a one-to-one ratio for use within the max system. This effectively gives them leverage on their investment. Additionally, Bluegreen owners have the option to use their equity to upgrade to a larger product.

Chaiken noted that the positive results in the fourth quarter, which saw an 8% increase in VPG compared to the forecasted 4% decline, support the bull case for Hilton Grand Vacations. The early conversion of sales centers and the ability to sell the HGV max product to Bluegreen customers are key factors in the raised price target and continued Outperform rating.

Hilton Grand Vacations’ strategy of leveraging Bluegreen’s customer base and the enhanced offerings through HGV max are central to Mizuho’s optimistic outlook. The firm’s revised price target reflects confidence in the company’s direction and its potential for sustained growth in VPG. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, while management continues to show confidence through aggressive share buybacks. InvestingPro subscribers have access to additional valuable insights, including 6 more ProTips and detailed valuation metrics.

In other recent news, Hilton Grand Vacations Inc . reported its fourth quarter 2024 earnings, revealing a notable miss on both earnings per share (EPS) and revenue compared to analyst expectations. The company’s EPS was $0.49, falling short of the anticipated $0.81, while revenue totaled $1.28 billion, slightly below the forecasted $1.3 billion. Despite these misses, Hilton Grand Vacations experienced a 9% year-over-year growth in contract sales, reaching $837 million. The company has also launched the HGV Max program and plans to expand strategic partnerships with Bass Pro and Choice Hotels (NYSE:CHH) in 2025. Additionally, Hilton Grand Vacations’ full-year 2024 adjusted EBITDA stood at $1.1 billion, underscoring strong operational performance amid economic challenges. Analysts from firms like Truist Securities and Barclays (LON:BARC) have been closely monitoring these developments, noting the company’s strategic initiatives and financing optimization plans. Hilton Grand Vacations aims to increase its non-recourse borrowing to 65-70% in 2025, which is expected to enhance financial flexibility and support growth initiatives. The company has set ambitious goals for 2025, including adjusted EBITDA guidance between $11.25 billion and $11.65 billion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.