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Earnings Estimates Moving Higher for Wyndham (WH): Time to Buy?

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Wyndham Hotels (WH - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this hotel and resort chain reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Wyndham, as there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

The company is expected to earn $0.62 per share for the current quarter, which represents a year-over-year change of -10.14%.

The Zacks Consensus Estimate for Wyndham has increased 8.19% over the last 30 days, as five estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $3.84 per share for the full year, which represents a change of +21.52% from the prior-year number.

The revisions trend for the current year also appears quite promising for Wyndham, with six estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 5.88%.

Favorable Zacks Rank

The promising estimate revisions have helped Wyndham earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Wyndham have attracted decent investments and pushed the stock 13.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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