What Happened?
Shares of hospitality company Travel + Leisure (NYSE: TNL) jumped 15.3% in the afternoon session after the company reported third-quarter results that topped Wall Street's expectations for profit and revenue.
The leisure travel company posted adjusted earnings of $1.80 per share on revenue of $1.04 billion. These figures surpassed the consensus estimates, which called for earnings of $1.71 per share on revenue of $1.03 billion. The company's sales grew by 5.1% compared to the same period in the previous year. Furthermore, Travel + Leisure provided a full-year adjusted EBITDA guidance with a midpoint of $975 million, which was in line with analyst expectations. The positive report sent the company’s stock to a new 12-month high.
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What Is The Market Telling Us
Travel + Leisure’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for Travel + Leisure and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 2.6% as a confluence of negative economic data pointed to a weak economy. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations are rising, while their outlook on the labor market is deteriorating. Consumers expressed greater concern about potential job losses and expect lower earnings growth, factors that directly impact discretionary spending. Adding to the unease, Chief Economist at Moody's Analytics, Mark Zandi, warned that 22 states are already showing clear signs of a recession, placing the broader U.S. economy in a precarious position. The ongoing U.S. government shutdown further dampens sentiment, threatening to weigh on incomes and purchasing power.
Travel + Leisure is up 39.5% since the beginning of the year, and at $69.57 per share, has set a new 52-week high. Investors who bought $1,000 worth of Travel + Leisure’s shares 5 years ago would now be looking at an investment worth $1,934.
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