2024-06-22 00:29:42 ET
Summary
- Marriott Vacations Worldwide shares have underperformed, losing one-third of their value in the past year, amid a fire in Hawaii and rising credit losses.
- Q1 earnings beat expectations, but consumer credit delinquencies and limited discretionary spending are headwinds.
- Despite risks from ongoing delinquencies, VAC should generate enough free cash flow to cover dividends and some buybacks.
Shares of Marriott Vacations Worldwide ( VAC ) have been a poor performer over the past year, losing about one-third of their value. Losses related to the Hawaii fires last year and increasing consumer credit delinquencies have weighed on results. I last covered VAC in November, rating shares a “ sell ,” given my concerns about consumer credit and discretionary spending. Since then, shares have returned just 2%, missing out on the market’s 29% gain. Given this dramatic underperformance, a “sell” rating was justified, but now is a good time to see if the underperformance has created a more compelling relative value opportunity....
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Marriott Vacations Worldwide: Consumer Credit Concerns Remain A Headwind