JPMorgan Starts Travel + Leisure (TNL) at Neutral

JPMorgan analyst Daniel Politzer initiates coverage on Travel + Leisure (NYSE: TNL) with a Neutral rating and a price target of $70.00.

The analyst comments: “We initiate TNL at Neutral, as we view the shares as appropriately reflecting a stable and durable earnings algo that is working well. We view TNL as the “blue chip” of Timeshare stocks, but this is balanced by likely limited upside to Street estimates and the backdrop of a mature industry that could face incremental pressures from rising interest rates. Our YE27 PT is $70.

We view TNL as the industry bellwether… Its 13% ROIC (on JPM math; compares to 26% on TNL methodology) is comfortably ahead of HGV and VAC, reflecting a leaner, more organically built capital base, strong execution, and a FCF compounding loop that has reduced TNL’s share count by 38% since its 2018 spin. TNL’s ROIC-WACC economic value added is also wider than its peers, which have layered on large debt-funded acquisitions (HGV’s Diamond/Bluegreen and VAC’s ILG/Welk) that weigh on invested capital and returns.”

For an analyst ratings summary and ratings history on Travel + Leisure click here. For more ratings news on Travel + Leisure click here.

Shares of Travel + Leisure closed at $62.90 yesterday.

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