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Wyndham Hotels & Resorts Inc Ordinary Shares WH

Morningstar Rating
$77.30 +0.24 (0.31%)
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Company Report

Wyndham's Brand Continues to Grow Amid Uncertainty Around the Merger With Choice

Despite near-term macro challenges (inflation, depleted consumer savings, and credit) and uncertainty around Choice's unsolicited bid for the company, we expect Wyndham Hotels & Resorts to gradually expand room share in the hotel industry and maintain a brand intangible asset and switching cost advantage. This view is supported by the company's roughly 40% share of all U.S. economy and midscale branded hotels (where Wyndham has a handful of the top 10 brands based on guest satisfaction, according to J.D. Power) and the industry’s fourth-largest loyalty program by membership (105 million as of Sept. 30, 2023), which encourages third-party hotel owners to join the platform. Also, Wyndham has around 10% and 5% share of existing U.S. and global hotel rooms, respectively, with a pipeline that represents around 28% of its current unit base. As a result, we see room growth averaging over 3%-4% during the next 10 years (2023-32), above the 1%-2% lift we model for the U.S. hotel industry.

Price vs Fair Value

WH is trading at a 12% discount.
Price
$77.30
Fair Value
$96.00
Uncertainty
Medium
1-Star Price
$341.10
5-Star Price
$89.10
Economic Moat
Pkgqf
Capital Allocation
Vhmjnspd

Bulls Say, Bears Say

Bulls

The La Quinta brand offers long-term growth opportunity to 2,000 units from 918 at the end of 2022.

Bears

Home and vacation rentals present an increasing competitive threat, and the advancement of technology and its use by next-generation travelers increase the access and awareness of these properties.

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News

Trading Information

Previous Close Price
$77.06
Day Range
$77.0477.90
52-Week Range
$63.6981.00
Bid/Ask
$60.00 / $123.68
Market Cap
$6.41 Bil
Volume/Avg
2 / 900,319

Key Statistics

Price/Earnings (Normalized)
20.24
Price/Sales
4.73
Dividend Yield
1.77%
Dividend Yield (Forward)
1.81%
Total Yield
7.95%

Company Profile

As of Dec. 31, 2022, Wyndham Hotels & Resorts operates 843,000 rooms across more than 20 brands predominantly in the economy and midscale segments. Super 8 is the largest brand, representing around 19% of all rooms, with Days Inn (14%) and Ramada (14%) the next two largest brands. During the past several years, the company has expanded its extended stay/lifestyle brands, which appeal to travelers seeking to experience the local culture of a given location. Wyndham launched a new extended stay economy scale segment concept, ECHO, in the spring of 2022. The United States represents roughly 60% of total rooms. The company closed its La Quinta acquisition in the second quarter of 2018, adding around 90,000 rooms at the time the deal closed.
Sector
Consumer Cyclical
Industry
Lodging
Stock Style Box
Small Core
Total Number of Employees
2,500

Competitors

Valuation

Metric
WH
H
MAR
Price/Earnings (Normalized)
20.2451.0524.32
Price/Book Value
7.493.41
Price/Sales
4.731.942.68
Price/Cash Flow
18.5320.9419.04
Price/Earnings
WH
H
MAR

Financial Strength

Metric
WH
H
MAR
Quick Ratio
0.810.620.45
Current Ratio
1.070.730.48
Interest Coverage
4.993.087.94
Quick Ratio
WH
H
MAR

Profitability

Metric
WH
H
MAR
Return on Assets (Normalized)
8.02%3.90%10.39%
Return on Equity (Normalized)
35.18%13.42%1,463.88%
Return on Invested Capital (Normalized)
13.19%7.51%25.26%
Return on Assets
WH
H
MAR

Lodging Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
MAR
Marriott International Inc Class AFlcdfh$60.1 Bil
HLT
Hilton Worldwide Holdings IncVffccjw$43.1 Bil
ICHGF
InterContinental Hotels Group PLCYzrpfv$13.5 Bil
IHG
InterContinental Hotels Group PLC ADRNdcctc$13.5 Bil
H
Hyatt Hotels Corp Class AJlqgst$12.2 Bil
HTHT
H World Group Ltd ADRYrqmgy$11.1 Bil
ACCYY
Accor SA ADRTmcpff$9.8 Bil
ACRFF
Accor SALwkfkv$9.8 Bil
CHH
Choice Hotels International IncQpgpbfn$5.5 Bil