Investing.com - Oppenheimer raised its price target on Travel + Leisure stock (NYSE:TNL) to $85 from $75 on Wednesday while maintaining an Outperform rating following the company's fourth-quarter earnings beat. The new target represents potential upside from the current price of $77.30, which has already surged 31.96% over the past year. According to InvestingPro data, the stock recently hit a new 52-week high, reflecting strong momentum that has delivered a 23.48% return over the past six months.
Travel + Leisure reported fourth-quarter 2025 EBITDA of $272 million, exceeding Oppenheimer's estimate of $255 million and the Street's estimate of $258 million. Sales reached $1,026 million, compared to Oppenheimer's projection of $983 million and the Street's $998 million. This performance continues the company's track record of profitability, with a diluted EPS of $6.05 over the last twelve months. InvestingPro analysis shows TNL has maintained dividend payments for 19 consecutive years and currently offers a 3.07% yield - just one of several ProTips available for investors seeking deeper insights into the company's financial health.
Vacation Ownership sales increased 8% year-over-year, driven by volume per guest growth of 2% and tour growth of 5%. Travel & Membership sales declined 6% year-over-year due to lower exchange revenues.
The company completed a strategic review of its resort portfolio in 2025, identifying 17 resorts that require owner reinvestment or are in markets that no longer align with owner demand. The resort optimization initiative provides a net EBITDA benefit of $15 million to $25 million in fiscal 2026. This strategic move aligns with the company's strong financial position, as its current ratio of 2.94 indicates liquid assets comfortably exceed short-term obligations.
Travel + Leisure issued fiscal 2026 guidance of EBITDA between $1,030 million and $1,055 million, gross vacation ownership interest sales of $2.5 billion to $2.6 billion, and volume per guest of $3,175 to $3,275. With analysts forecasting EPS of $6.60 for fiscal 2025 and a current P/E ratio of 12.83, the stock is trading at a premium relative to its near-term earnings growth potential according to InvestingPro's comprehensive analysis, which provides Fair Value estimates and detailed research reports for over 1,400 US equities.
In other recent news, Travel + Leisure reported fourth-quarter adjusted earnings that surpassed analyst expectations. The company showed solid revenue growth, even as it undertook significant inventory write-downs due to its resort optimization initiative. These recent developments highlight the company's strategic focus on enhancing its resort offerings. The earnings report was well-received, as the company managed to deliver strong financial results despite the challenges associated with the optimization plan. Travel + Leisure's ability to exceed earnings forecasts reflects positively on its operational strategies. The company's announcement of its resort optimization plan is part of its ongoing efforts to improve efficiency and service offerings. These developments are crucial for investors monitoring the company's performance and strategic direction.