Wyndham Earnings: Ancillary Sales, Infrastructure Demand, and Favorable Comparisons Are Tailwinds

Narrow-moat Wyndham Hotels & Resorts' shares rose 9% in Oct. 24 intraday trading as the company outlined the benefits of ancillary revenue, infrastructure demand, and easing comparisons. While our 2025 forecast for revenue per available room growth of 2.5% already accounts for easing comparisons, we plan to increase our 2025-30 sales estimates for incremental ancillary and US infrastructure opportunities. As a result, we plan to increase our $85 fair value estimate by around a high-single-digit percentage. The shares appear slightly undervalued, even reflecting the expected increase in our valuation.