Wyndham Worldwide Corp.WYN is scheduled to report first-quarter 2018 earnings on May 2, before the opening bell.
The company believes that its efforts to enhance guest experience and raise occupancy will reflect in its first-quarter revenues. The company has increasingly focused on marketing campaigns, digital experiences, websites, on-property amenities, travel perks and marketing partnerships to drive its overall top line. However, a tense macro-economic condition along with a slight dearth of tourists in the United States in the recent times might have had affected the company's revenues in the to-be-reported quarter. Also, shares of Wyndham have gained 20.9% in the past year, underperforming the industry 's rally of 26.8%.
Factors at Play
The Zacks Consensus Estimate for Wyndham's first-quarter earnings is pegged at $1.27, reflecting an increase of 11.4% from the year-ago quarter. Earnings also grew 6.8% in 2017, thereby setting a positive trend. We believe that management's steady endeavor in enhancing stock holder's value by share repurchases will continue to drive the bottomline.
In the meantime, the recent acquisition of AmericInn might have aided profits in the to-be-reported quarter. Moreover, Wyndham's ongoing strategic initiative to expand the number of new owners is expected to have reflected in the quarter's profitability.
Although Wyndham's strong presence across the globe allows it to rake in additional revenues, the consensus estimate pegs first-quarter revenues at $1.23 billion, reflecting a 6.4% year-over-year decline. We are of the opinion that a sluggish economy in Brazil, uncertainty in Africa, and macroeconomic factors in Venezuela and China are likely to keep revenues under pressure. The company expects soft demand in oil-producing regions to continue hurting RevPAR too.
Our Quantitative Model Does Not Predict a Beat
Wyndham does not have the right combination of two main ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat.
Zacks ESP: The company has an Earnings ESP of -0.99%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: Wyndham has a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Wyndham Worldwide Corp Price and EPS Surprise
Stocks to Consider
Here are a few stocks from the Consumer Discretionary sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Earnings ESP for Walt Disney DIS , Marriott MAR and Discovery Communications DISCA is +1.34%, +0.40%, +0.39%, respectively. Each of these companies carrying a Zacks Rank #3, is scheduled to report their quarterly numbers on May 8.
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