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Wyndham Hits a 52-Week High

Zacks Equity Research

Shares of leading hotelier, Wyndham Worldwide Corporation (WYN), reached a new 52-week high of $73.48 on Monday, Dec 23, 2013 ahead of its fourth-quarter 2013 with the expectation of strong fourth-quarter 2013 results.

The closing price of the hotelier on Dec 23 was $72.49, representing a solid one-year return of about 38.9% and year-to-date return of about 33.9%. Average volume of shares traded over the last three months stands at approximately 1061K.

Upcoming Results

Wyndham is expected to report fourth-quarter 2013 earnings results in early Feb 2014. The company projects fourth-quarter earnings to be within 70 cents–72 cents per share, representing an impressive year-over-year growth of 22.8%–26.3%. The Zacks Consensus Estimate for the fourth-quarter stands at 74 cents.

The company has been witnessing solid earnings growth in the past three quarters, benefiting from increased revenues, improved margin and lower share count due to aggressive share buybacks by the company. Wyndham’s solid performance across all three operating segments — Lodging, Vacation Exchange and Rentals and Vacation Ownership — has enabled it to outperform even in this difficult consumer spending environment. In fact, the hotelier has beaten the Zacks Consensus Estimate for the past eight quarters.

We expect the company’s fourth-quarter results to be no different. Both the top and bottom lines should be strong in the quaretr. In fact, during its third-quarter conference call, the company has raised its earnings per share expectation for 2013 to a range of $3.78–$3.80, up from $3.66–$3.76. This is the second time in a row that Wyndham has raised its earnings expectation following solid quarterly results. Consecutive raise in earnings guidance sets a bullish tone for the coming quarters, helped by a strong developmental pipeline, significant international exposure and transition to a greater fee-for-service-based business.

Other Stocks to Consider

Wyndham holds a Zacks Rank #2 (Buy). Investors interested in the hotel and lodging industry may consider stocks like Home Inns & Hotels Management Inc. (HMIN), Orient-Express Hotels Ltd. (OEH) and Marriott International, Inc. (MAR). While Home Inns & Hotels and Orient-Express Hotels sport a Zacks Rank #1 (Strong Buy), Marriott holds the same rank as Wyndham.

Read the Full Research Report on WYN
Read the Full Research Report on MAR
Read the Full Research Report on OEH
Read the Full Research Report on HMIN

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