Investors in Travel + Leisure Co. (NYSE:TNL) had a good week, as its shares rose 9.2% to close at US$45.12 following the release of its yearly results. The result was positive overall – although revenues of US$3.8b were in line with what the analysts predicted, Travel + Leisure surprised by delivering a statutory profit of US$5.28 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
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After the latest results, the six analysts covering Travel + Leisure are now predicting revenues of US$3.92b in 2024. If met, this would reflect a reasonable 4.6% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$5.43, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.88b and earnings per share (EPS) of US$5.38 in 2024. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$50.39, suggesting that the company has met expectations in its recent result. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Travel + Leisure analyst has a price target of US$61.00 per share, while the most pessimistic values it at US$35.00. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Travel + Leisure’s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.6% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.9% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.4% annually for the foreseeable future. So although Travel + Leisure’s revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$50.39, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Travel + Leisure analysts – going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Travel + Leisure (1 is concerning!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
