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Wyndham Hotels & Resorts Inc Ordinary Shares WH

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Stock XNYS Rating as of
$75.36 +3.40 (4.72%)
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As of Delayed Price Closed
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Company Report

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

Dan Wasiolek

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.

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Price vs Fair Value

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WH is trading at a 21% discount.
Price
$69.91
Fair Value
$24.00
Uncertainty
Medium
1-Star Price
$591.20
5-Star Price
$93.40
Economic Moat
Wcmxx
Capital Allocation
Wgrkrlf

Bulls Say, Bears Say

Bulls

The La Quinta brand offers long-term growth opportunity to around 2,000 units from 918 at the end of 2023.

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

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Trading Information

Previous Close Price
$71.96
Day Range
$71.34–76.45
52-Week Range
$63.69–81.73
Bid/Ask
$73.65 / $77.12
Market Cap
$6.10 Bil
Volume/Avg
1.9 Mil / 727,377

Key Statistics

Price/Earnings (Normalized)
17.84
Price/Sales
4.35
Dividend Yield (Trailing)
2.05%
Dividend Yield (Forward)
2.05%
Total Yield
8.73%

Company Profile

As of Dec. 31, 2023, Wyndham Hotels & Resorts operates 872,000 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 (13%) 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. The company closed its La Quinta acquisition in the second quarter of 2018, adding around 90,000 rooms at the time the deal closed. Wyndham launched a new extended stay economy scale segment concept, ECHO, in the spring of 2022. The United States represents 57% of total rooms.
Sector
Consumer Cyclical
Industry
Lodging
Stock Style Box
Small Core
Total Number of Employees
2,300
Website
https://www.wyndhamhotels.com

Competitors

Valuation

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Metric
WH
HLT
IHG
Price/Earnings (Normalized)
 17.8431.3225.37
Price/Book Value
 7.80——
Price/Sales
 4.355.053.74
Price/Cash Flow
 17.9647.4721.22
Price/Earnings
WH
HLT
IHG

Financial Strength

Metric
WH
HLT
IHG
Quick Ratio
 0.670.750.90
Current Ratio
 0.810.840.97
Interest Coverage
 4.634.669.44
Quick Ratio
WH
HLT
IHG

Profitability

Metric
WH
HLT
IHG
Return on Assets (Normalized)
 8.05%11.00%14.45%
Return on Equity (Normalized)
 37.47%——
Return on Invested Capital (Normalized)
 13.44%25.33%52.08%
Return on Assets
WH
HLT
IHG
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Lodging Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
MAR
Marriott International Inc Class AHvxspwsBrjg$70.4 Bil
HLT
Hilton Worldwide Holdings IncHqkfrjvwTqwsg$51.0 Bil
ICHGF
InterContinental Hotels Group PLC—Bykds$16.5 Bil
IHG
InterContinental Hotels Group PLC ADRFttblpbrYrvvp$16.3 Bil
H
Hyatt Hotels Corp Class AQrrbnmbScklqc$15.3 Bil
HTHT
H World Group Ltd ADR—Xhjzlgh$12.4 Bil
ACRFF
Accor SA—Mznrzn$10.9 Bil
ACCYY
Accor SA ADR—Qhnqld$10.8 Bil
CHH
Choice Hotels International IncQlkbtzmsXtbmqgn$5.9 Bil

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