Travel + Leisure Co. (NYSE:TNL), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Travel + Leisure’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Great news for investors – Travel + Leisure is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $96.13, but it is currently trading at US$71.28 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Travel + Leisure’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
See our latest analysis for Travel + Leisure
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 8.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Travel + Leisure, at least in the short term.
Are you a shareholder? Even though growth is relatively muted, since TNL is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on TNL for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TNL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
