At US$46.91, Is It Time To Put Travel + Leisure Co. (NYSE:TNL) On Your Watch List?

Simply Wall St · 10/17 13:21

Travel + Leisure Co. (NYSE:TNL), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Travel + Leisure’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Travel + Leisure

What Is Travel + Leisure Worth?

Great news for investors – Travel + Leisure is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Travel + Leisure’s ratio of 8.15x is below its peer average of 23.38x, which indicates the stock is trading at a lower price compared to the Hospitality industry. Although, there may be another chance to buy again in the future. This is because Travel + Leisure’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Travel + Leisure generate?

earnings-and-revenue-growth
NYSE:TNL Earnings and Revenue Growth October 17th 2024

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Travel + Leisure, it is expected to deliver a relatively unexciting earnings growth of 2.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Travel + Leisure, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since TNL is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could 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 enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TNL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Travel + Leisure at this point in time. For instance, we've identified 2 warning signs for Travel + Leisure (1 is significant) you should be familiar with.

If you are no longer interested in Travel + Leisure, you can use our free platform to see our list of over 50 other stocks with a high growth potential.