Timeshare Stocks See Mixed Ratings Amid Growth Concerns
Skift Take
Morgan Stanley issued mixed ratings on major timeshare companies, highlighting strong free cash flow but cautioning about slow growth and interest rate pressures.
The DJIA was down 26 points but Nasdaq was up 243, the S&P 500 rose 33 points and the 10-year treasury yield was up .02 to 4.62%. Lodging stocks were mixed. AHT was the big winner, up 13% while SOND was the big loser, down -13%.
It was a big day for the timeshare industry as Morgan Stanley initiated coverage on the group with overweight ratings on Travel + Leisure and Hilton Grand Vacations while Marriott Vacations was started at Underweight. MS said they feel timeshare companies are often misunderstood businesses currently trading at some of the highest FCF yields across the gaming/lodging/leisure space. MS warned that anemic industry growth plus pressures from higher interest rates warrant a tactical view of the space & individual stories. They have a $67 price target on TNL, $47 on HGV, and an $87 PT on VAC.
Marriott International, Inc. announced the 147-room Courtyard by Marriott San Mateo Foster City had complet
