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JMP Securities sets $50 target on Travel + Leisure shares

EditorNatashya Angelica
Published 02/13/2024, 03:53 AM
Updated 02/13/2024, 03:53 AM
© Reuters.

On Tuesday, Travel + Leisure Co. (NYSE:TNL), a leading provider of vacation ownership products and services, received a new stock rating from JMP Securities. The firm initiated coverage with a Market Outperform rating and set a price target of $50.00 per share. This represents an 18.5% potential upside from the stock's last closing price of $42.17, with the additional benefit of a 4.5% dividend yield, potentially leading to a total return of 23.0%.

JMP Securities' price target is grounded on a valuation multiple of 7.1 times the company's estimated 2025 EBITDA, or 7.4 times the projected 2025 earnings per share. This target multiple is notably lower than the five-year average multiples for both Travel + Leisure and the broader Timeshare industry, which stand at 7.8x and 8.2x, respectively.

Travel + Leisure's stock performance and the company's potential for growth are underscored by the analyst's optimistic outlook. The firm's assessment suggests that Travel + Leisure's shares are poised for an increase, based on the current trading price and the company's financial projections.

The 4.5% yield offered by Travel + Leisure is an additional factor for potential investors to consider, as it adds to the total return profile of the stock beyond the capital appreciation anticipated by JMP Securities.

InvestingPro Insights

As Travel + Leisure Co. (NYSE:TNL) garners attention with a new stock rating from JMP Securities, InvestingPro offers additional insights into the company's financial health and market position. With a market capitalization of $3.05 billion, the company is trading at a price-to-earnings (P/E) ratio of 9.01, which is adjusted to 8.08 when considering the last twelve months as of Q3 2023. Notably, the stock is trading near its 52-week high, at 96.15% of the peak, reflecting investor confidence and a strong market performance with a three-month price total return of 24.51%.

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The company's commitment to shareholder returns is evident through its 17 consecutive years of maintained dividend payments, which is currently yielding 4.27%. This is complemented by a dividend growth of 12.5% over the last year, showcasing the company's dedication to delivering value to its investors. Additionally, Travel + Leisure’s liquidity position is robust, with liquid assets surpassing short-term obligations, providing financial flexibility and stability.

For those looking to delve deeper into Travel + Leisure's stock potential, InvestingPro offers further InvestingPro Tips, including insights on the company's share buyback strategy and near-term earnings growth potential. With the stock's volatility and the high P/E ratio relative to near-term earnings growth in mind, investors can make more informed decisions. To access more comprehensive analysis and additional tips, consider a subscription to InvestingPro. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the 8 additional tips listed for Travel + Leisure Co. on InvestingPro.

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

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