On Friday, Mizuho Securities adjusted its outlook on Marriott Vacations Worldwide (NYSE:VAC), reducing the price target to $126 from the previous $128. The investment firm maintained a Buy rating on the stock despite the adjustment.
The revision follows a review of the company's first-quarter performance in 2024 and preliminary information for the second quarter. Mizuho noted that for the second half of 2024, Marriott Vacations would need to accelerate its performance more than initially expected.
As a consequence of this updated forecast, Mizuho has revised its estimates for the company's contract sales and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The new price target reflects these adjustments.
Marriott Vacations Worldwide's financial outlook, according to Mizuho, now incorporates the need for a stronger recovery in the latter half of the year. The firm's statement highlighted, "Based on 1Q24 and preliminary color on 2Q, 2H24 requires greater acceleration than we previously anticipated."
The price target adjustment to $126 from $128 is a direct result of the recalibrated expectations for the company's contract sales and earnings. Marriott Vacations Worldwide's stock performance and future financial results will continue to be monitored by investors following this updated guidance from Mizuho.
In other recent news, Marriott Vacations Worldwide has been the subject of revised financial projections and strategic developments. Truist Securities updated its outlook on the company, raising the price target to $161 from $159 while maintaining a Buy rating.
The firm adjusted the 2024 Adjusted EBITDA estimate to $786 million, up from $765 million, and the 2025 estimate to $816 million from $803 million. However, the 2024 and 2025 EPS projections were revised to $7.69 and $8.31 respectively, both down from previous estimates.
In parallel, Marriott Vacations reported growth and new developments in its first-quarter 2024 earnings call. The company noted a 3% increase in contract sales and a 9% rise in first-time buyer tours. The opening of a new Marriott Vacation Club Resort in Waikiki, which has seen strong reservations, and the signing of an agreement to develop a new 60-unit resort in Thailand were also highlighted.
The company's full-year adjusted EBITDA is expected to remain steady at $760 million to $800 million.
InvestingPro Insights
Marriott Vacations Worldwide (NYSE:VAC) has been the subject of revised expectations, as noted by Mizuho Securities. In light of this, insights from InvestingPro could provide investors with additional context. The company's market capitalization stands at $3.1 billion, with a forward P/E ratio for the last twelve months as of Q1 2024 at 11.75, indicating a potentially attractive valuation relative to earnings. Furthermore, the company has demonstrated a commitment to shareholder returns, as evidenced by a consistent dividend policy, having raised its dividend for 3 consecutive years and maintaining dividend payments for 11 consecutive years. The dividend yield as of mid-2024 is 3.45%, coupled with a dividend growth of 5.56% for the last twelve months as of Q1 2024.
InvestingPro Tips reveal that management's confidence is reflected in aggressive share buybacks, and analysts anticipate sales growth in the current year. Moreover, with liquid assets surpassing short-term obligations, the company's financial health suggests resilience. For investors seeking more comprehensive analysis, InvestingPro offers additional tips on Marriott Vacations Worldwide; in fact, there are 5 more InvestingPro Tips available, providing a deeper dive into the company's performance and outlook. Utilize coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for further insights.
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