Wyndham Needs to Meet Earnings Expectations to Book the Attention of Investors

Friday, July 9, 2021 | Chris Markoch
Wyndham Needs to Meet Earnings Expectations to Book the Attention of Investors

Wyndham Hotels & Resorts (NYSE:WHhas been a recovery stock winner. In the last 12 months, WH stock is up 66% and through the first half of 2021, it’s up nearly 20% (19.88 as of this writing). However, the travel and tourism sector continues to face a couple of notable headwinds.  

First, business travel is not yet back. And to be fair, nobody is altogether sure when, or if, it will get back to pre-pandemic highs. That’s not being hyperbolic. I understand there are many American workers who are enthusiastically waiting to travel for business (I count several of them in my personal network). However, many Americans are deciding what the next leg of their career journey will look like. For many, that may be a future that includes more remote work.  

Second, the Delta variant of the novel coronavirus is delaying the return of international travel. And Wyndham noted that its revenue generated per available room (RevPar) was down 40% internationally compared to a 28% decline domestically.  

Wyndham Services Both Kinds of Travelers 

There are times when being a “jack of all trades” works to the detriment of a company, and a stock. This is not one of those times. The Wyndham portfolio consists of a network of budget to mid-level  properties. While the company may still have a while to wait on business travel, it is likely to benefit from the pent-up demand of individuals and families who want to travel, but who may still be keeping one eye on the budget. 

And Wyndham has a global footprint. So as cross-border travel picks up the company will see a benefit from that as well.  

A Strong Balance Sheet 

Despite the pandemic, Wyndham Hotels & Resorts managed to remain profitable in 2020. And the company posted a total shareholder return of 60% last year.  

And although it did slash its dividend as a way to manage costs, the company raised its dividend by 8 cents in February, bringing it up to 16 cents per share. While that is 50% below pre-pandemic levels, it was an aggressive increase. Mature companies, such as Wyndham, raise their dividends for one reason an expectation of growth.  

That is a premise that is being challenged as some analysts believe that Wyndham is prioritizing its dividend over earnings growth. That will be something for investors to watch, particularly given the fact that Wyndham sports a mixed bag in terms of fundamentals. 

Analysts Love Wyndham Stock 

Wyndham is covered by 12 analysts, and all the analysts give the stock a buy rating. The consensus price target for the stock suggests that WH stock may have peaked. However, since the company reported earnings in April, five analysts have upgraded their price targets. In each case, they give Wyndham a price target higher than its current level. And four of the five have price targets that are above the stock’s current 52-week high of $78.13. 

Wait For Earnings to Provide Direction 

Wyndham stock is moving towards oversold territory on higher than average volume. However, in the last 12 months, WH stock has been in a consistent pattern of rising prices. The 20-day simple moving average (SMA) recently crossed below the 50-day SMA. Although both averages are well above the 200-day SMA, you’d ideally like to see the 20-day move ahead of the 50-day before taking a position, particularly since the stock is trading near its 52-week high. 

Earnings season can provide that kind of catalyst. Last quarter, Wyndham missed on revenue, but delivered a beat on earnings. Analysts are setting a high bar. At a consensus EPS of 62 cents, they are essentially forecasting that the hotel chain will be operating at “close to normal” conditions, at least in terms of recreational travel. If the company posts a beat, that may be the springboard for the next leg up.  

Should you invest $1,000 in Wyndham Hotels & Resorts right now?

Before you consider Wyndham Hotels & Resorts, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Wyndham Hotels & Resorts wasn't on the list.

While Wyndham Hotels & Resorts currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Wyndham Hotels & Resorts (WH)2.2$76.03+3.9%1.26%63.36Buy$70.70
Compare These Stocks  Add These Stocks to My Watchlist 

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.