Travel + Leisure Co's Q2 profit edges past estimates

Overview

• Travel + Leisure Q2 revenue of $1.02 bln missed analyst expectations

• Adjusted EPS of $1.65 beat estimates, per LSEG data

• Vacation Ownership revenue increased 6% yr/yr, driven by higher VOI sales

Outlook

• The company, which focuses on timeshare resorts, expects Q3 adjusted EBITDA of $250 mln to $260 mln

• Travel + Leisure forecasts Q3 gross VOI sales of $650 mln to $680 mln

• Company anticipates full-year adjusted EBITDA of $955 mln to $985 mln

• Travel + Leisure projects full-year gross VOI sales of $2.4 bln to $2.5 bln

Result Drivers

• VACATION OWNERSHIP GROWTH - Vacation Ownership revenue increased 6% to $853 mln, driven by a 7% rise in volume per guest and a 3% increase in tours

• VOI SALES GROWTH - Net vacation ownership interest sales rose 7% year-over-year, despite a higher provision rate

• TRAVEL AND MEMBERSHIP DECLINE - Revenue in the Travel and Membership segment decreased 6% due to a 7% drop in transaction revenue

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the hotels, motels & cruise lines peer group is "buy"

• Wall Street's median 12-month price target for Travel + Leisure Co is $64.00, about 9.6% above its July 22 closing price of $57.85

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nBw84Ykdma