Is It a Bird? Is it a Plane? - Either way, Goldman Says Buy Marriott (VAC)

October 8, 2012 7:50 AM EDT Send to a Friend
Get Alerts VAC Hot Sheet
Price: $76.06 +0.50%

Rating Summary:
    2 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 38 | New: 13
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Goldman Sachs reiterated a Buy on Marriott Vacations Worldwide (NYSE: VAC) and raised its price target to $43.50 (from $39.00).

"We reiterate our Buy on Marriott Vacations and believe its valuation is relatively inexpensive at only 5.8X 2013E EV/EBITDA compared to similar businesses and also compared to Wyndham (NYSE: WYN)," said analyst Eli Hackel.

While Hackel admits there is no clear valuation comparison, he thinks Marriott Vacation's business has characteristics of several industries including homebuilding, manager/franchisor, lender, and hotel owner.

"We looked at the current multiples of each of these sectors and found that Marriott Vacation’s core business is still trading on average a 6-point EV/EBITDA multiple discount to these companies (excluding banks since they are P/E). While these are not the exact same businesses, as one could argue homebuilding for example is at more of a trough, we think undertaking this analysis provides another comp," he said.

For an analyst ratings summary and ratings history on Marriott Vacations Worldwide click here. For more ratings news on Marriott Vacations Worldwide click here.

Shares of Marriott Vacations Worldwide closed at $38.02 yesterday.

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