Marriott Vacations initiated with an Underweight at Morgan Stanley

Morgan Stanley analyst Stephen Grambling initiated coverage of Marriott Vacations (VAC) with an Underweight rating and $87 price target The firm sees risk to shares from the company’s lower credit quality and potential inventory rebuild. Marriott Vacations’ average consumer FICO eroded since pre-COVID, leaving risk of a structurally higher loan loss provision, the analyst tells investors in a research note. Meanwhile, Morgan Stanley says the company has the lowest number of years of sales in inventory coupled with an elevated number of owners relative to units, both pointing to a greater need to build inventory versus peers.