Markets

Wyndham (WYN) to Report Q4 Earnings: A Beat in the Cards?

A pen next to a calculator.
Credit: Shutterstock photo

We expect Wyndham Worldwide CorporationWYN to beat expectations when it reports fourth-quarter and full-year 2016 numbers on Feb 15, before the opening bell.

Last quarter, Wyndham posted a positive earnings surprise of 1.07%. In fact, the company's earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 0.98%.

Let's see how things are shaping up for this announcement.

Wyndham Worldwide Corp Price and EPS Surprise

Wyndham Worldwide Corp Price and EPS Surprise | Wyndham Worldwide Corp Quote

Why a Likely Positive Surprise?

Our proven model shows that Wyndham is likely to beat on earnings because it has the perfect combination of the two key ingredients.

Zacks ESP : Earnings ESP for Wyndham is +2.31% because the Most Accurate estimate is pegged at $1.33, while the Zacks Consensus Estimate stands at $1.30. A favorable Zacks ESP serves as a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Wyndham currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Wyndham's favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.

What is Driving the Better-than-Expected Earnings?

Wyndham's strong developmental pipeline, consistent expansion plans, significant international exposure and robust marketing efforts is expected to drive earnings in the to-be-reported quarter. Increasing business and leisure travel on the back of an improving economy and positive employment numbers along with higher transaction volumes should also boost the quarter's results.

Additionally, the company's robust vacation ownership or timeshare business - which is one of the fastest evolving and profitable sectors in the hospitality industry - is likely to further propel fourth-quarter performance. Moreover, Wyndham's attractive Loyalty and Rewards Program along with other strategic initiatives undertaken are likely to increase occupancy.

However, lingering uncertainty in various economies like Europe, Brazil and China is likely to limit revenue growth. Also, soft demand in oil producing regions is likely to hurt revenue per available room (RevPAR) in the fourth quarter. Additionally, negative currency translation is likely to hamper the company's results as it has been doing over the past few quarters, given Wyndham's considerable international operations.

Other Stocks to Consider

Wyndham is not the only company looking up this earnings season. Here are some other hotel companies to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:

Extended Stay America, Inc. STAY has an Earnings ESP of +21.43% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Hyatt Hotels Corporation H has an Earnings ESP of +12.50% and a Zacks Rank #3.

Marriott International, Inc. MAR has an Earnings ESP of +2.41% and a Zacks Rank #3.

Zacks' Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

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

Wyndham Worldwide Corp (WYN): Free Stock Analysis Report

Marriott International (MAR): Free Stock Analysis Report

Hyatt Hotels Corporation (H): Free Stock Analysis Report

Extended Stay America, Inc. (STAY): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

STAY H MAR

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More