Bond.az - Goldman Sachs upgraded Travel + Leisure (NYSE:TNL) to Buy from Neutral on Monday and set a price target of $85.00.
The firm believes the stock's decline following first-quarter results was excessive. Travel + Leisure lost approximately $700 million in market capitalization after the quarter due to a 20 basis point increase in loan loss provisions, new owner concerns and the absence of a guidance increase. The company now trades at a market cap of $4.24 billion with a P/E ratio of 19.11.
Goldman Sachs views Travel + Leisure as the cleanest capital-light recurring fee business in the timeshare sector. The company has avoided integration and operational turnaround challenges that peers Marriott Vacations Worldwide and Hilton Grand Vacations have faced in recent years. According to Bond.az Tips, management has been aggressively buying back shares while raising dividends for four consecutive years, underscoring confidence in the business model. The stock currently offers a 3.53% dividend yield and has delivered a 45% return over the past year. However, Bond.az analysis suggests the stock may be overvalued at current levels.
The firm considers Travel + Leisure's 2026 guidance conservative. The company is delivering mid-single-digit EBITDA growth and earnings per share growth in the teens, which Goldman Sachs says is not available elsewhere in its coverage at this valuation.
Goldman Sachs sees 25% upside to its $85 price target over the next 12 months.
In other recent news, Travel & Leisure Co. announced the issuance and sale of $900 million in senior secured notes due 2031. The notes, carrying an interest rate of 6.250% per year, were priced at 100% of their principal amount. The company plans to use the proceeds to redeem its outstanding 6.625% secured notes due 2026, pay down borrowings under its secured revolving credit facility, and for general corporate purposes. Additionally, Travel & Leisure declared a regular cash dividend of $0.60 per share, payable on June 30, 2026, to shareholders of record as of June 12, 2026.
At its 2026 annual meeting, shareholders elected eight directors to serve until the 2027 annual meeting and approved executive pay. Each director received substantial support, with at least 47.5 million votes in favor. These developments reflect the company's ongoing financial strategies and governance activities.
