Wyndham Earnings: Easing Comparisons Should Drive Sales Growth the Rest of 2024; Shares Undervalued

Narrow-moat Wyndam’s global constant-currency revenue per available room increased just 1% in the first quarter as the hotelier faced its hardest comparison of the year (12% growth) as well as calendar and weather headwinds. We still believe Wyndham will achieve its 2%-3% constant-currency revPAR growth target for the year, driven by easing comparisons and international demand. In fact, revenue on the books for May is pacing up 7%. We don’t plan a material change to our $88 fair value estimate and think Wyndham’s current 11.5 times forward enterprise value/EBITDA multiple should expand to be closer to narrow-moat peer Choice’s 13 times given similar competitive positioning and growth opportunities.