On Friday, Truist Securities updated their financial model for Hilton Grand Vacations (NYSE:HGV), increasing the stock's price target to $70.00 from the previous $66.00. The firm has maintained a Buy rating on the shares. The adjustment follows the release of the company's fourth-quarter earnings for 2023 and takes into account the recent acquisition of Blue Green Vacations, which was completed on January 17, 2024.
The analyst from Truist Securities highlighted that the updated model now includes contributions from the acquisition, with income statements and key performance indicators revised to reflect the historical pro forma results according to Blue Green Vacations' recast financials.
As a result of the acquisition and recent earnings, the analyst has revised upward the projections for Hilton Grand Vacations' 2024 Adjusted EBITDA to $1,238 million from the earlier estimate of $1,066 million. Additionally, the 2024 earnings per share (EPS) projection has been increased to $3.47 from $3.39.
Looking ahead to 2025, Truist Securities introduced an Adjusted EBITDA projection of $1,321 million and an EPS forecast of $3.96. The new price target of $70 is based on a blended 8.8x multiple applied to the firm's 2025 estimated EBITDA, a slight decrease from the previously used 9.2x multiple. The analyst pointed out that Hilton Grand Vacations is currently trading at multiples of 5.9x and 6.5x the firm's 2024 and 2025 EBITDA estimates, respectively.
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