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If you are wondering whether Travel + Leisure is priced attractively or already baking in a lot of optimism, its recent track record and current valuation metrics give you plenty to think about.
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The share price closed at US$70.84, with recent moves including a 3.0% decline over the last 7 days, a 2.2% decline over 30 days, and a 1.7% decline year to date, set against a 30.6% return over 1 year, 91.4% over 3 years, and 54.2% over 5 years.
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Recent news coverage around Travel + Leisure has focused on the broader travel and leisure sector, ownership of well known vacation brands, and how investors are weighing cyclical demand against long term travel habits. This context helps explain why the stock has periods of pullback even when longer term returns remain strong.
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On our valuation checks, Travel + Leisure currently scores 5 out of 6 for being undervalued. Next we will walk through what different valuation approaches say about that score and why there may be an even better way to think about value by the end of this article.
Travel + Leisure delivered 30.6% returns over the last year. See how this stacks up to the rest of the Hospitality industry.
A Discounted Cash Flow model takes estimates of the cash a company could generate in the future and discounts those cash flows back to today, aiming to arrive at an intrinsic value per share.
For Travel + Leisure, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $525.8 million. Analysts provide specific forecasts out to 2027, with Free Cash Flow projected at $555.4 million in 2026 and $560 million in 2027. Beyond that, Simply Wall St extrapolates cash flows out to 2035, with projected figures such as $595.2 million in 2030 and $691.9 million in 2035, each discounted back to reflect their value in today’s dollars.
When these discounted cash flows are added together, the model arrives at an estimated intrinsic value of about $100.10 per share. Compared with the recent share price of $70.84, the DCF implies that Travel + Leisure trades at a 29.2% discount to this estimate. On this model, the shares appear undervalued.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Travel + Leisure is undervalued by 29.2%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Travel + Leisure.
For a profitable company like Travel + Leisure, the P/E ratio is a useful way to see how much investors are paying for each dollar of earnings. Higher growth expectations and lower perceived risk usually justify a higher P/E, while slower growth or higher risk tend to support a lower, more cautious multiple.
Travel + Leisure currently trades on a P/E of 11.14x. That sits below both the Hospitality industry average P/E of 21.36x and the broader peer average of 49.82x, which suggests the market prices its earnings more conservatively than many competitors.
Simply Wall St’s Fair Ratio for Travel + Leisure is 17.73x. This is a proprietary P/E estimate that reflects the company’s earnings growth profile, profit margins, risk factors, industry, and market cap. Because it adjusts for these company specific drivers, the Fair Ratio can be more informative than a simple comparison to industry or peer averages, which do not control for differences in quality, growth or risk. Set against the current P/E of 11.14x, the Fair Ratio indicates that the shares are trading below that tailored benchmark.
Result: UNDERVALUED
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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way for you to attach your own story about Travel + Leisure to the numbers. You can link your view of its future revenue, earnings and margins to a financial forecast, a Fair Value, and a clear comparison with the current share price, all within the Narratives tool on Simply Wall St’s Community page. This tool updates automatically as new news or earnings arrive and lets you see, for example, how an optimistic Travel + Leisure Narrative with a Fair Value around US$89 can sit alongside a cautious one closer to US$42. You can then decide which story best fits your own framework for when the stock looks attractively priced or expensive.
For Travel + Leisure, we will make it really easy for you with previews of two leading Travel + Leisure Narratives:
These are built from the same underlying data you have seen so far, but frame it in two different ways so you can test which set of assumptions feels closer to your view before you look at the full details.
🐂 Travel + Leisure Bull Case
Fair value: US$78.33 per share
Implied discount to this fair value: about 9.6% compared with the recent price of US$70.84
Revenue growth used in this narrative: 3.65% a year
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Analysts in this camp see expanding brands and partnerships, such as Accor, Sports Illustrated Resorts and Margaritaville, plus international growth, as widening the customer base and supporting revenue and earnings stability.
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They point to a mainly recurring revenue mix, an asset light approach and technology investment as helping margins, free cash flow and the consistency of earnings.
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At the same time, they acknowledge concentration in US vacation ownership, industry consolidation and leverage above 3x as key risks that could weigh on earnings if conditions turn less favorable.
🐻 Travel + Leisure Bear Case
Fair value: US$42.14 per share
Implied premium to this fair value: about 68.1% compared with the recent price of US$70.84
Revenue growth used in this narrative: 3.08% a year
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This more cautious view focuses on climate and regulatory pressures on travel, public health and geopolitical shocks, and tighter rules around timeshares as headwinds for demand and pricing power.
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It also highlights competition from alternative lodging platforms and higher labor costs as possible drags on margins, even with an asset light model.
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Supporters of this view still recognize the role of recurring revenue, digital investment and brand partnerships, but see the current market price as already rich relative to their assumed future earnings and P/E multiple.
If you want to go beyond the quick preview and see how other investors are thinking about Travel + Leisure, it can help to read both sides in full and then decide where your own assumptions sit between them, or if you disagree with both and want to frame a different story entirely.
Curious how numbers become stories that shape markets? Explore Community Narratives
Do you think there’s more to the story for Travel + Leisure? Head over to our Community to see what others are saying!
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.
Companies discussed in this article include TNL.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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