SKN | Morgan Stanley Lifts Travel + Leisure Target to $80 on Recurring Revenue Strength

Key Takeaways

• Morgan Stanley raised its price target on Travel + Leisure Co. to $80 from $68.

• The Overweight rating was maintained, reflecting confidence in the company’s demographic positioning and recurring revenue model.

• Vacation Ownership growth and disciplined capital returns underpin the revised valuation outlook.

Morgan Stanley has increased its price target on Travel + Leisure Co. to $80 while reiterating its Overweight rating, signaling continued conviction in the company’s ability to outperform within a mixed leisure environment.

Sector Context: Selective Resilience

In its 2026 sector outlook, Morgan Stanley described gaming, lodging, and leisure fundamentals as muted through 2025, with strength concentrated among businesses serving older and higher-income consumers.

Looking ahead, the bank expects similar patterns in 2026, though macro influences such as interest rate trends could shape consumer spending preferences between goods and services. Within this framework, Travel + Leisure’s core demographic profile appears comparatively insulated.

Operating Performance and Financial Discipline

In the third quarter of 2025, Travel + Leisure reported net income of $111 million, or $1.67 per diluted share, on revenue of $1.04 billion. Adjusted EBITDA reached $266 million, reflecting operational consistency.

The Vacation Ownership segment posted 6% year-over-year revenue growth to $876 million, driven by a 10% increase in volume per guest. The figures suggest sustained engagement within its membership base despite broader discretionary caution.

The company also returned $106 million to shareholders through dividends and share repurchases, reinforcing capital allocation discipline.

Brand Expansion and Diversification

Travel + Leisure continues to broaden its multi-brand platform, including the launch of the Eddie Bauer Adventure Club and the planned Sports Illustrated Resort in Chicago. These initiatives extend the company’s brand footprint and diversify revenue channels beyond traditional timeshare offerings.

The asset-light, membership-driven structure enhances cash flow visibility and provides leverage to recurring vacation demand.

Valuation and Strategic Positioning

Morgan Stanley’s higher target reflects incremental confidence in earnings durability and the company’s ability to sustain growth through demographic alignment and brand expansion.

The Overweight rating indicates expectations for outperformance relative to discretionary peers, particularly those more exposed to lower-income or rate-sensitive consumers.

Outlook

Travel + Leisure’s trajectory will depend on sustained member engagement, disciplined cost control, and continued brand expansion.

In a sector facing moderate demand trends, the company’s recurring revenue structure and targeted customer base position it to navigate cyclical softness while preserving earnings growth potential.

For confidential discussions regarding leisure sector allocation, recurring revenue valuation modeling, and portfolio positioning within consumer discretionary franchises serving higher-income demographics, our senior advisory team is available for discreet consultation tailored to institutional and cross-border investment mandates.