Wyndham (WYN) Q2 Earnings: Disappointment in the Cards?
Wyndham Worldwide Corporation WYN is scheduled to report second-quarter 2016 results on Jul 27, before the opening bell.
Last quarter, Wyndham posted a positive earnings surprise of 0.90%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 1.93%.
Let’s see how things are shaping up for this announcement.
WYNDHAM WORLDWD Price and EPS Surprise
WYNDHAM WORLDWD Price and EPS Surprise | WYNDHAM WORLDWD Quote
Factors Likely to Influence this Quarter
Wyndham’s quarterly revenues have mostly topped the consensus mark in the past few quarters on the back of various sales and marketing initiatives. We expect this trend to continue in the second quarter as well. Moreover, the company’s robust vacation ownership business – which is gaining popularity among millennials lately – should further aid top-line growth. Also, growing popularity of the Wyndham Loyalty and Rewards Program should lead to increased occupancy.
However, lingering global uncertainty in various economies like Europe, Brazil and China is likely to limit revenue growth. Also, soft demand in the oil producing regions is likely to hurt RevPAR in the to-be-reported quarter.
Additionally, despite the weakening of the U.S. dollar against other major foreign currencies in the recent past, negative currency translation is expected to reduce the value of overseas sales, thereby marring revenues and profits in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Wyndham is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Wyndham has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.36.
Zacks Rank: Wyndham has a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Vail Resorts Inc. MTN has an earnings ESP of +1.21% and a Zacks Rank #2.
Penn National Gaming Inc. PENN has an earnings ESP of +24.14% and a Zacks Rank #3.
Wynn Resorts Ltd. WYNN has an earnings ESP of +1.03% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
WYNN RESRTS LTD (WYNN): Free Stock Analysis Report
PENN NATL GAMNG (PENN): Free Stock Analysis Report
WYNDHAM WORLDWD (WYN): Free Stock Analysis Report
VAIL RESORTS (MTN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
