Truist Securities has revised its price target for Marriott Vacations Worldwide (NYSE: VAC), reducing it to $139 from $159, while maintaining a Buy rating on the stock.
The firm adjusted its financial projections for the company, citing a decrease in expected earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS) for the years 2024 and 2025.
The new 2024 Adjusted EBITDA estimate is now set at $695 million, a reduction from the previous forecast of $777 million. Concurrently, the EPS projection for 2024 has been lowered to $5.96 from the earlier estimate of $7.54.
Looking ahead to 2025, Truist Securities anticipates an Adjusted EBITDA of $758 million, which is down from the initial estimate of $806 million. However, the EPS estimate for 2025 has been revised upwards to $8.39 from $8.14.
Marriott Vacations Worldwide reported mixed Q2 results for 2024, with rental performance exceeding expectations, but lower volume per guest figures affecting contract sales. The company revised its full-year contract sales forecast and increased its sales reserve due to a higher expected default rate on loans. Despite the mixed results, Marriott Vacations remains focused on creating shareholder value through dividends and buybacks, with plans for new resort openings.
The Vacation Ownership segment saw rental profit surge over 60% year-over-year. Full-year contract sales growth is projected to be between 1% and 3%, with a 7% decrease in VPG expected in the latter half of the year. The company has lowered its full-year adjusted EBITDA guidance to between $685 million and $715 million.
Marriott Vacations is planning for new resort openings in locations including Waikiki, Savannah, Charleston, Thailand, and Bali in the upcoming years.
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