Barclays Boosts Travel + Leisure Stock: Timeshare Trends Drive Upgrade

Barclays has upgraded its rating for Travel + Leisure (TNL) stock from Underweight to Equalweight, accompanied by an increased price target of $70.00, up from $60.00. This strategic shift by Barclays comes as the firm observes stabilizing trends within the timeshare industry, signaling a more optimistic outlook for the sector and its key players.

Key Takeaways

• Barclays upgrades Travel + Leisure (TNL) stock to Equalweight with a higher price target.

• The upgrade is driven by positive shifts in timeshare industry trends and stable delinquency rates.

• Travel + Leisure is expected to perform strongly in 2025 due to its focus on higher-margin repeat owner sales.

• The company's commitment to a seamless customer experience is a key factor in its repeat sales strategy.

• Potential for EBITDA growth in 2026 and beyond is noted, linked to improving owner credit quality.

Barclays' Optimism on Timeshare Industry

Barclays' decision to upgrade Travel + Leisure reflects a notable change in its perspective on the timeshare industry. Recent conference findings suggest that general timeshare trends and delinquency rates are appearing stable. This newfound confidence has led the financial institution to revise its stance on TNL, moving away from its previous negative outlook.

Strong Performance Expected for Travel + Leisure

Looking ahead to 2025, Barclays anticipates strong performance from Travel + Leisure. This positive forecast is largely attributed to the company's strategic focus on increasing sales to repeat owners, a segment known for its higher margins and conversion rates. The research firm specifically highlighted Travel + Leisure's leadership in delivering a frictionless customer experience, which is crucial for supporting its repeat sales initiatives.

Potential for Future Growth

Further bolstering the positive outlook, Barclays identified a potential tailwind for Travel + Leisure's EBITDA growth in 2026 and beyond. This projection is linked to the company's consistent improvements in owner credit quality. Barclays noted that this steady enhancement is currently out of sync with the existing reserve run-rate of 21%, suggesting that future adjustments as the reserve is right-sized lower could positively impact earnings.

Recent Corporate Developments

In other recent news, Travel + Leisure Co. announced a 50 basis point reduction in the interest rate on its $869 million 2024 Term Loan B Facility, bringing it to SOFR plus 2.00%. The loan's maturity date remains December 14, 2029. Additionally, Wells Fargo initiated coverage on Travel + Leisure with an Overweight rating and a $74.00 price target. Meanwhile, other companies like Jersey Mike’s Subs and Wyndham Hotels & Resorts have also made significant appointments and financial announcements, including dividend declarations.

Sources

• Barclays upgrades Travel + Leisure stock rating on timeshare trends By Investing.com, Investing.com.