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Wyndham Hits 52-Week High - Analyst Blog

Posted: 11/29/2013 10:00:00 AM
Referenced Stocks: HMIN;MAR;OEH;WYN

Shares of the hotelier, Wyndham Worldwide Corporation ( WYN ), reached a new 52-week high of $72.38 on Nov 27 following solid third-quarter 2013 results and a guidance upgrade announced on Oct 23.

The closing price of Wyndham on Nov 27, 2013, was $72.26, representing a solid one-year return of about 50.4% and year-to-date return of about 33.5%. Average volume of shares traded over the last three months stands at approximately 1059K.

Growth Drivers

Estimates for this hotelier have been rising higher after it announced solid third-quarter 2013 results which beat the Zacks Consensus Estimate for both revenues and earnings. Both the metrics also grew year over year. Following better-than-expected results in the third quarter, the company increased its earnings per share expectation for 2013 to a range of $3.78-$3.80, up from 3.66-$3.76.

Increased revenues, improved margin and lower share count boosted profits in the quarter. Wyndham's solid growth across all three operating segments - Lodging, Vacation Exchange and Rentals and Vacation Ownership - have 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.

The performance of the company sets a bullish tone for the long term, helped by the consecutive raise in earnings guidance, improving North American business and significant international expansion.

Overall, we are encouraged by the company's strong brand recognition, robust developmental pipeline, transition to fee-for-service-based businesses and solid cash flow generation which will act as compelling growth drivers and sustain earnings momentum in the upcoming quarters.

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 ), Marriott International, Inc. ( MAR ) and Orient-Express Hotels Ltd. ( OEH ). While Home Inns & Hotels sports a Zacks Rank #1 (Strong Buy), Marriott and Orient-Express Hotels hold the same rank as Wyndham.

HOME INNS&HOTEL (HMIN): Free Stock Analysis Report

MARRIOTT INTL-A (MAR): Free Stock Analysis Report

ORIENT EXP HOTL (OEH): Free Stock Analysis Report

WYNDHAM WORLDWD (WYN): Free Stock Analysis Report

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