Categories: Stock Market News

Morgan Stanley: timeshare shares present promise amid fee challenges


Investing.com — Morgan Stanley initiated protection on timeshare firms with a blended outlook, upgrading Journey + Leisure Co (NYSE:TNL) and Hilton Grand Holidays Inc (NYSE:HGV) to “chubby” whereas assigning an “underweight” ranking to Marriot Holidays Worldwide (NYSE:VAC). Brokerage highlighted the sector’s strong pre-pandemic returns however flagged headwinds from increased rates of interest.

TNL, buying and selling at an 8x ahead P/E and 14% free money circulate yield has pivot to high-credit-quality prospects, which Morgan Stanley (NYSE:MS) believes may drive beats and re-rating potential, setting a $67 value goal, implying 32% upside. HGV, supported by synergies from current acquisitions, is predicted to attain a 20% EPS CAGR by means of 2026, with a value goal of $47, reflecting 20% upside.

Whereas VAC faces dangers from declining proprietor credit score high quality and a possible have to rebuild stock, with a $87 value goal indicating 3% draw back. Morgan Stanley sees VAC as constrained by increased mortgage loss provisions and elevated prices.

Whereas timeshare shares have underperformed over the previous three years, MS famous their “misunderstood” potential, emphasizing that strategic shifts and steady progress prospects may drive outperformance within the sector.

 

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