Why Travel + Leisure Co. (NYSE:TNL) Could Be Worth Watching

While Travel + Leisure Co. (NYSE:TNL) might not have the largest market cap around , it saw a decent share price growth of 16% on the NYSE over the last few months. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Travel + Leisure’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Travel + Leisure

What's The Opportunity In Travel + Leisure?

Great news for investors – Travel + Leisure is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Travel + Leisure’s ratio of 9.73x is below its peer average of 24.17x, which indicates the stock is trading at a lower price compared to the Hospitality industry. 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.

What does the future of Travel + Leisure look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 9.2% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Travel + Leisure, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since TNL is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on TNL for a while, now might be the time to make a leap. Its future profit 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 strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about Travel + Leisure as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 3 warning signs we've spotted with Travel + Leisure (including 1 which is concerning).

If you are no longer interested in Travel + Leisure, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.