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Travel + Leisure Co (TNL)
NYSE:TNL
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Travel + Leisure Co
(NYSE:TNL)
65Neutral
Positive Factors
Acquisitions and Partnerships
TNL's acquisitions and business partnerships create significant opportunities for incremental property and customer acquisition and accelerating growth.
Business Performance
Strong consumer spending on travel combined with TNL's marketing capabilities and its ability to leverage technology and expanding business partnerships will continue to drive accelerating business performance.
Earnings
TNL's 4Q24 results showed revenues and adjusted EBITDA above both analyst and Street expectations, indicating strong performance.
Negative Factors
Loan Loss Provision
TNL's loan loss provision was slightly above estimates, but overall Gross VOI Sales were 3% higher than expected, indicating robust sales performance.
Travel + Leisure Co (TNL) vs. S&P 500 (SPY)
Market Cap
$3.19B
Dividend Yield4.13%
Average Volume (3M)724.37K
Price to Earnings (P/E)9.1
Beta (1Y)1.24
Revenue Growth3.52%
EPS Growth2.49%
CountryUS
Employees19,000
SectorConsumer Cyclical
Sector Strength51
IndustryHotels, Lodging & Leisure
Share Statistics
EPS (TTM)5.37
Shares Outstanding66,696,270
10 Day Avg. Volume775,789
30 Day Avg. Volume724,371
Financial Highlights & Ratios
PEG Ratio3.63
Price to Book (P/B)N/A
Price to Sales (P/S)0.81
Price to Cash Flow (P/CF)8.00
P/FCF Ratio2.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$62.67Price Target Upside32.66% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Travel + Leisure Co Business Overview & Revenue Model
Company DescriptionTravel + Leisure Co., together with its subsidiaries, provides hospitality services and products in the United States and internationally. The company operates in two segments, Vacation Ownership; and Travel and Membership. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers; provides consumer financing in connection with the sale of VOIs; and provides property management services at resorts. The Travel and Membership segment operates various businesses, including three vacation exchange brands, a home exchange network, travel technology platforms, travel memberships, and direct-to-consumer rentals. As of January 26, 2022, it had approximately 245 vacation ownership resorts. It also offers private-label travel booking technology solutions. The company was formerly known as Wyndham Destinations, Inc. and changed its name to Travel + Leisure Co. in February 2021. Travel + Leisure Co. was founded in 1990 and is headquartered in Orlando, Florida.
How the Company Makes MoneyTravel + Leisure Co generates revenue through multiple channels. A significant portion of its income comes from its vacation ownership business, where customers purchase timeshare interests in properties, often financing these purchases through the company's credit facilities. Additionally, it earns fees from managing these vacation properties. The company's travel and membership services also contribute to its earnings, with revenue derived from annual membership fees, transaction fees for travel bookings, and commission from third-party travel service providers. Moreover, partnerships with hospitality companies and marketing agreements further enhance its revenue streams, allowing Travel + Leisure Co to offer a comprehensive suite of services to its clientele.
Travel + Leisure Co Financial Statement Overview
Summary
Travel + Leisure Co demonstrates commendable profitability and operational efficiency with steady revenue growth and strong cash flow performance. However, the negative equity presents a significant risk factor, indicating financial instability and potential challenges in accessing capital. While the company has made strides in reducing debt, continued focus on improving balance sheet health is crucial for long-term sustainability.Income Statement
The company has shown a positive revenue growth rate of 3.04% in the most recent period, indicating a steady recovery trajectory post-pandemic. Gross profit margin stands at 54.87%, while net profit margin is 10.64%, showing solid profitability. EBIT and EBITDA margins are healthy at 18.97% and 23.55%, respectively, illustrating efficient operational performance. However, revenue has not yet returned to pre-2020 levels, suggesting room for further growth.75
Positive
Balance Sheet
The balance sheet shows a concerning level of negative stockholders' equity, at -$880 million, indicating potential financial instability. The debt-to-equity ratio is not meaningful due to negative equity, but the company has managed to reduce total debt significantly to zero, improving leverage. With an equity ratio of -13.07%, the company may face challenges in financing and investment opportunities. Return on equity calculation is not applicable due to negative equity.45
Neutral
Cash Flow
Operating cash flow has improved significantly to $464 million, providing a positive operating cash flow to net income ratio of 1.13. Free cash flow growth of 38.77% is strong, indicating robust cash generation capability. The free cash flow to net income ratio of 0.93 underscores efficient cash conversion despite previous cash flow fluctuations.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.86B | 3.75B | 3.57B | 3.13B | 2.16B | Gross Profit |
| 2.12B | 1.82B | 1.73B | 1.54B | 927.00M | EBIT |
| 733.00M | 720.00M | 653.00M | 618.00M | 95.00M | EBITDA |
| 877.00M | 860.00M | 878.00M | 751.00M | 42.00M | Net Income Common Stockholders |
| 411.00M | 396.00M | 357.00M | 308.00M | -253.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 184.00M | 306.00M | 562.00M | 396.00M | 1.23B | Total Assets |
| 6.74B | 6.74B | 6.76B | 6.59B | 7.61B | Total Debt |
| 5.67B | 5.73B | 5.75B | 5.45B | 6.58B | Net Debt |
| -167.00M | 5.45B | 5.20B | 5.08B | 5.38B | Total Liabilities |
| 7.62B | 7.66B | 7.66B | 7.38B | 8.58B | Stockholders Equity |
| -880.00M | -918.00M | -913.00M | -801.00M | -975.00M |
| Cash Flow | Free Cash Flow | |||
| 383.00M | 276.00M | 390.00M | 511.00M | 305.00M | Operating Cash Flow |
| 464.00M | 350.00M | 442.00M | 568.00M | 374.00M | Investing Cash Flow |
| -124.00M | -80.00M | -50.00M | -93.00M | -65.00M | Financing Cash Flow |
| -458.00M | -500.00M | -196.00M | -1.29B | 502.00M |
Travel + Leisure Co Technical Analysis
Negative
47.24
Price Trends
52.48
Negative
52.04
Negative
47.75
Negative
Market Momentum
-1.60
Positive
38.16
Neutral
58.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNL, the sentiment is Negative. The current price of 47.24 is below the 20-day moving average (MA) of 49.63, below the 50-day MA of 52.48, and below the 200-day MA of 47.75, indicating a bearish trend. The MACD of -1.60 indicates Positive momentum. The RSI at 38.16 is Neutral, neither overbought nor oversold. The STOCH value of 58.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TNL.
Travel + Leisure Co Risk Analysis
Travel + Leisure Co disclosed 24 risk factors in its most recent earnings report. Travel + Leisure Co reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Travel + Leisure Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $7.15B | 25.60 | 41.40% | 1.65% | ― | 6.40% | |
71 Outperform | $6.01B | 24.06 | 38.12% | 5.41% | 3.57% | 13.75% | |
65 Neutral | $3.19B | 9.06 | -46.70% | 4.13% | 3.52% | 2.49% | |
63 Neutral | $3.58B | 81.13 | 2.43% | ― | 25.21% | -83.25% | |
61 Neutral | $976.85M | ― | -0.45% | 3.74% | -12.29% | -105.55% | |
59 Neutral | $12.60B | 11.17 | 0.97% | 3.72% | 1.34% | -21.34% | |
59 Neutral | $2.33B | 11.76 | 9.04% | 4.64% | 5.08% | -10.62% |
* Consumer Cyclical Sector Average
Performance Comparison
TNL
Travel + Leisure Co
47.24
0.40
0.85%
VAC
Marriott Vacations Worldwide Corporation
66.74
-36.90
-35.60%
MTN
Vail Resorts
161.00
-50.87
-24.01%
WGO
Winnebago Industries
37.58
-34.73
-48.03%
HGV
Hilton Grand Vacations
37.87
-9.34
-19.78%
WH
Wyndham Hotels & Resorts
92.19
16.84
22.35%
Travel + Leisure Co Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -16.80% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong EBITDA growth, successful strategic initiatives, and positive customer satisfaction. However, challenges such as higher interest rates, structural headwinds in the exchange business, and elevated delinquencies were noted. Despite these challenges, forward guidance remains optimistic with expectations of continued growth and strategic focus.Highlights
Strong EBITDA Growth
For 2024, we delivered $929 million of adjusted EBITDA, indicating strong financial performance and growth momentum.
Vacation Ownership Tour Growth
Vacation ownership business fueled 2024 success with tour growth of 8% and 7% growth in enterprise-wide gross vacation ownership sales.
New Partnerships and Strategic Initiatives
Signed several national and regional partnerships, including Allegiant Airlines and Live Nation, expected to lead to multiyear incremental tour opportunities.
High Customer Satisfaction
Strong owner satisfaction rates and successful app launches with positive reviews and higher booking conversion rates.
Capital Returns to Shareholders
Paid a $2.00 per share dividend and repurchased 7% of outstanding shares, totaling $377 million in capital returned to shareholders.
Positive Forward Guidance
Expect adjusted EBITDA range of $955 million to $985 million for 2025, with continued focus on core business execution and strategic growth.
Lowlights
Higher Interest Rate and Compensation Headwinds
Faced significantly higher interest rate and variable compensation headwinds totaling $37 million.
Structural Headwinds in Exchange Business
Exchange transactions down 5% due to continued mix shift, presenting ongoing challenges despite travel club growth.
Delinquencies Remain Higher than Historical Levels
Delinquencies higher in Q1 and Q2, although the gap closed slightly by year-end; provision for the full year at 20%.
Interest Rate Environment Impact
Potentially negative impact from interest rate increases on ABS transactions, affecting financial outlook for 2025.
Company Guidance
During the fourth quarter 2024 earnings call, Travel + Leisure Co. provided guidance for 2025, anticipating adjusted EBITDA to range between $955 million and $985 million. The company expects gross VOI (Vacation Ownership Interest) sales to fall between $2.4 million and $2.5 million, with VPG (Volume Per Guest) anticipated to range from $3,050 to $3,150. The travel membership segment is projected to achieve flat to 2% growth in adjusted EBITDA. Additionally, the effective income tax rate is expected to be between 28% and 30%, influenced by the impact of Pillar Two. The company also plans an adjusted free cash flow conversion exceeding 50%. For the first quarter of 2025, adjusted EBITDA is forecasted to be between $195 million and $205 million, with BPGs (Bookings Per Guest) ranging from $3,150 to $3,250 and a tax rate of 29% to 31%. The company intends to propose a first-quarter 2025 dividend of $0.56 per share, reflecting a 12% increase over the previous quarter.Travel + Leisure Co Corporate Events
Business Operations and StrategyFinancial Disclosures
Travel + Leisure Co. Reports Strong 2024 Financial Results
Positive
Feb 19, 2025
On February 19, 2025, Travel + Leisure Co. reported robust financial results for the fourth quarter and full year of 2024, with significant achievements such as a net income of $411 million and net revenue of $3.9 billion for the year. The company highlighted a strong performance in vacation ownership sales, attributing its success to strategic acquisitions and effective cost management. Looking forward, the company projects continued profitable growth in 2025, focusing on expanding its vacation ownership business and enhancing shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.