Mizuho has revised its price target for Travel + Leisure (TNL, Financial), decreasing it slightly to $63 from the previous $64. Despite this adjustment, the firm maintains a Neutral rating on the company's stock.
The analyst explained that Travel + Leisure's first-quarter performance surpassed initial concerns, demonstrating resilience. Furthermore, future trends for the company appear to be either stable or on an upward trajectory, which contributed to the decision to keep the current rating unchanged.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Travel+Leisure Co (TNL, Financial) is $59.42 with a high estimate of $72.00 and a low estimate of $39.00. The average target implies an upside of 38.02% from the current price of $43.05. More detailed estimate data can be found on the Travel Leisure Co (TNL) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Travel+Leisure Co's (TNL, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Travel+Leisure Co (TNL, Financial) in one year is $53.38, suggesting a upside of 24% from the current price of $43.05. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Travel Leisure Co (TNL) Summary page.
TNL Key Business Developments
Release Date: April 23, 2025
- Adjusted EBITDA: $202 million, at the high end of guidance range.
- Adjusted EBITDA Margin: Increased from 21% to 22% year-over-year.
- Adjusted Diluted Earnings Per Share: $1.11, a 14% increase.
- Vacation Ownership Segment Revenue: $755 million, a 4% increase.
- Vacation Ownership Adjusted EBITDA: $159 million, an 18% increase.
- Volume Per Guest (VPG): $3,212, above $3,000.
- Tour Flow: Down 1% for the quarter, but year-over-year growth in March.
- Travel and Membership Segment Revenue: $180 million, down 7%.
- Travel and Membership Adjusted EBITDA: $68 million, down 9%.
- Exchange Transactions: Declined by 13%.
- Travel Club Transaction Growth: 3% increase.
- Operating Cash Flow: $121 million.
- Adjusted Free Cash Flow: $152 million.
- Dividend Increase: 12% to $0.56 per share.
- Share Repurchases: $70 million or 1.3 million shares in Q1.
- Leverage Ratio: 3.3 times, expected to end the year below 3.4 times.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Travel+Leisure Co (TNL, Financial) delivered $202 million of adjusted EBITDA, reaching the high end of their guidance range.
- The Vacation Ownership business showed strong performance with VPGs well above $3,000, contributing to a 22% increase in consolidated adjusted EBITDA margins.
- The company increased its dividend by 12% to $0.56 per share and repurchased $70 million worth of shares, returning significant capital to shareholders.
- The Club Wyndham app has seen increased adoption, with nearly 100,000 downloads, leading to a 71% search-to-book conversion rate, a 22% increase compared to the owner website.
- Travel+Leisure Co (TNL) maintained strong forward bookings and travel trends, indicating consumer resilience despite macroeconomic uncertainties.
Negative Points
- The Travel and Membership segment experienced a 7% decline in revenue and a 9% decrease in adjusted EBITDA, driven by a 13% decline in exchange transactions.
- Tour flow in the Vacation Ownership segment was down 1% for the quarter, although there was year-over-year growth in March.
- The improvement in portfolio delinquencies typically seen from December to March did not occur, leading to an increased provision rate assumption of 21%.
- The booking window decreased from 130 to 116 days compared to the previous year, indicating a potential shift in consumer booking behavior.
- There is increased uncertainty in the macroeconomic outlook and consumer sentiment has progressively fallen in 2025, which could impact future performance.
