TOURISM HOLDINGS LIMITED (THL)
Share Price Analysis and Chart

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26/02/2025

3

Hold

$1.73

-15.20%

Morgans' notes Tourism Holdings Rentals' 1H25 underlying net profit was down -33% y/y, weighed down by a -4% decline in vehicle sales.

Ex-fleet sales margins dropped to 24.4% from 26.1% and retail recreational vehicle (RV) sales margin fell to 9.1% from 10.8%.

The result was, however, stronger than the broker's forecast, though it now acknowledges there's a risk to the company's target of achieving net profit growth in FY25. 

The key risk is a more prolonged downturn in RV sales, and margin and volume pressure in the Australian market. The broker is closely monitoring US/Canada tariff situation for any potential impact on North American outlook.

Target price drops to $1.73 from $2.02 as the broker cut FY25 and FY26 net profit forecasts by -20.7% and -21.8% respectively. Rating stays at Hold.

FORECAST
Morgans forecasts a full year FY25 dividend of 7.29 cents and EPS of 19.15 cents.
Morgans forecasts a full year FY26 dividend of 10.03 cents and EPS of 25.53 cents.

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30/04/2025

2

Downgrade to Overweight from Buy

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Tourism Holdings Rentals provided a trading update indicating to Jarden a further deterioration in vehicle sales and a slowdown in forward bookings in the US.

Management believes underlying profit for FY25 will be "significantly below" the current consensus forecast.

The broker notes a material decline in US tourism bookings, although rental demand outside the US remains positive, supporting a more stable outlook into FY26.

While net debt remains manageable under extended facilities, Jarden highlights a higher net debt to earnings, well above pre-covid levels, raising concerns over balance sheet pressure if trading conditions worsen further.

Jarden downgrades earnings forecasts by -32%-40% across FY25-27, reflecting reduced vehicle sales, lower rental revenue per asset, and a smaller fleet size. The target falls to NZ$3.00 from NZ$4.21 and the rating is downgraded to Overweight from Buy.

Jarden notes the company's dominant A&NZ market position and resilience in rental yields, but also recognises uncertainty in North America due to tariff risks.

FORECAST
Jarden forecasts a full year FY25 dividend of 5.47 cents and EPS of 14.04 cents.
Jarden forecasts a full year FY26 dividend of 6.38 cents and EPS of 16.14 cents.