Travel + Leisure Co. (NYSE:TNL) isn’t the biggest company, but it saw a double-digit share price increase of more than 10% over the past two months on the NYSE. The company is inching closer to its year-to-date high due to recent stock price gains. With many analysts covering the mid-cap stock, one might expect price-sensitive announcements to be already factored into the stock price. But what if you still have the opportunity to buy? Let’s take a look at Travel + Leisure’s outlook and value based on the latest financial data to see if the opportunity still exists.
See our latest analysis on Travel + Leisure
What is the value of Travel + Leisure?
Good news for investors – Travel + Leisure is still trading at a fairly low price, according to our price multiple model, which compares the company’s price-to-earnings ratio to the industry average. In this example, we used the price-to-earnings ratio (PE) given that there is not enough information to reliably predict a stock’s cash flows. Travel + Leisure’s ratio of 8.15x is lower than the peer average of 23.38x, indicating that the stock is trading at a discount compared to the Hospitality industry. However, there may be an opportunity to purchase again in the future. This is because Travel + Leisure’s beta value (a measure of stock price volatility) is high, meaning its price movements are exaggerated compared to the rest of the market. If the market is bearish, the company’s stock price will likely fall more than the rest of the market, making it a great buying opportunity.
What kind of growth will Travel + Leisure generate?
NYSE:TNL Earnings and Revenue Growth October 17, 2024
Future outlook is an important aspect when considering buying a stock, especially for investors looking for growth in their portfolio. Buying a great company with a solid outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, the Travel + Leisure segment is expected to see relatively disappointing earnings growth of 2.4%, which doesn’t help strengthen the company’s investment thesis. Growth doesn’t seem to be the main reason for Travel + Leisure’s purchase decision, at least in the short term.
what this means to you
Are you a shareholder? Although growth has been relatively slow, TNL is currently trading below its industry P/E ratio, so now may be a great time to further increase your holdings in the stock. However, there are also other factors to consider, such as capital structure, which may explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on TNL for a while, now might be the time to get into the stock. It’s not too late to buy TNL, as future earnings expectations are not yet fully reflected in the current share price. However, to make an informed investment decision, please consider other factors, such as the track record of the management team, before making any investment decision.
So while the quality of earnings is important, it’s equally important to consider the risks facing Travel + Leisure at the moment. For example, we’ve identified 2 warning signs for Travel + Leisure (1 is significant) you should know about.
If you’re no longer interested in Travel + Leisure, use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
