What Happened?
Shares of vacation ownership company Marriott Vacations (NYSE: VAC) fell 7.3% in the afternoon session after an analyst at Mizuho downgraded the company's stock. The rating was moved from "Outperform" to "Neutral," and the price target was significantly cut by over 31% from $85.00 to $58.00. This analyst action appeared to reverse the positive sentiment from the previous day, when the stock jumped after the company announced the immediate departure of its CEO, John Geller. Matthew E. Avril was appointed as the interim chief executive. The downgrade from Mizuho followed other recent price target reductions from firms including Citizens and Barclays, signaling growing concerns among analysts about the company's outlook.
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What Is The Market Telling Us
Marriott Vacations’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock gained 6.1% on the news that the company announced the departure of its President and CEO, John Geller, and a plan to buy back shares. The departure was made at the request of the company's board. In a move that signaled confidence, the company also announced plans to repurchase shares under its remaining $347 million program, with both the board and management stating their belief that the company's shares were undervalued. Matthew E. Avril, an independent director with over 30 years of experience in the industry, was appointed as the Interim President and CEO while the board began its search for a permanent replacement. Alongside these changes, Marriott Vacations reaffirmed its 2025 guidance but postponed its planned Investor Day.
Marriott Vacations is down 46.8% since the beginning of the year, and at $46.53 per share, it is trading 53.1% below its 52-week high of $99.25 from November 2024. Investors who bought $1,000 worth of Marriott Vacations’s shares 5 years ago would now be looking at an investment worth $369.29.
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