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Wyndham (WH) Down 10% Year to Date: Should Investors Buy Now?
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So far this year, Wyndham Hotels & Resorts, Inc. (WH - Free Report) has disappointed investors with its stock performance, underperforming both the industry and the S&P 500. This underperformance is due to a decline in revenues in the last three quarters and softer-than-expected revenues per available room trends, which have negatively impacted the company's financial results.
In contrast to the industry's 9.4% increase, Wyndham’s stock has decreased 10% year to date. As of Jul 5, the stock closed at $72.34, significantly below its 52-week high of $81.73 but above its 52-week low of $65.63. Despite this decline, the stock has shown some resilience in the past month, improving by nearly 2% and currently trading above its 50-day moving average.
Stock Performance
Image Source: Zacks Investment Research
Wyndham is currently trading at a discount with a forward 12-month P/E ratio of 16.05, which is significantly lower than the industry average of 22.66. The company is currently trading at a discount compared to its industry peers, such as Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Marriott International, Inc. (MAR - Free Report) . This lower valuation might present an opportunity for WH investors, but it's essential to analyze the factors that could help the stock rebound.
Valuation
Image Source: Zacks Investment Research
Focus on AI Bodes Well
WH focuses on leveraging AI and innovation to transform operations, enhancing efficiency, productivity and overall guest experiences to foster growth.
The company has integrated AI across its operations to enhance efficiency and service quality. In its call centers, AI provides real-time coaching and handles calls, which allows agents more time to assist guests. The company implemented an easy-to-access chatbot within the mobile app that answers about 60% of common guest queries, thereby improving the guest experience and freeing staff for high-priority cases, such as quickly validating and awarding Wyndham Rewards points.
WH recently announced the rollout of a new guest engagement platform, Wyndham Connect, in North America. This initiative aims to enhance guest experiences and streamline owner operations through advanced technology. Management is optimistic and anticipates the initiative to foster strong guest relationships and financial gains in the upcoming periods. Currently, the company rolled out Wyndham Connect to nearly 2,000 hotels in North America.
Expansion Efforts
Wyndham is focused on expanding its geographic footprint and product offerings across all segments by leveraging the company’s diversified brand portfolio. This accretive aim of the company is backed by its disciplined capital allocation strategy, which encompasses investments in high-return businesses accompanied by strategic collaborations and buyouts.
On May 14, 2024, WH entered a partnership with Decameron All Inclusive Hotels & Resorts, significantly expanding its all-inclusive offerings to more than 50 resorts globally. This includes nine new resorts in Mexico, Panama and Jamaica, enhancing WH's product portfolio and global market presence while integrating these resorts into Wyndham Rewards for member benefits. As of the first quarter, WH’s global development pipeline consisted of nearly 2,000 hotels and approximately 243,000 rooms, showcasing an 8% year-over-year increase. Among the total pipeline, about 58% of it is international.
Estimate Movement
Estimates for WH’s 2024 earnings have moved up from $4.25 to $4.26 in the past 30 days. The company’s earnings and sales in 2024 are expected to witness growth of 6.2% and 3.7%, respectively, year over year.
Conclusion
Investors might find Wyndham appealing for their portfolios, given its current Zacks Rank #2 (Buy) rating. The company stands to benefit from its robust expansion efforts and AI initiatives, positioning WH for growth. Additionally, the stock is trading at a favorable valuation. The combination of strategic growth plans and attractive pricing makes it a compelling consideration for potential investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Wyndham (WH) Down 10% Year to Date: Should Investors Buy Now?
So far this year, Wyndham Hotels & Resorts, Inc. (WH - Free Report) has disappointed investors with its stock performance, underperforming both the industry and the S&P 500. This underperformance is due to a decline in revenues in the last three quarters and softer-than-expected revenues per available room trends, which have negatively impacted the company's financial results.
In contrast to the industry's 9.4% increase, Wyndham’s stock has decreased 10% year to date. As of Jul 5, the stock closed at $72.34, significantly below its 52-week high of $81.73 but above its 52-week low of $65.63. Despite this decline, the stock has shown some resilience in the past month, improving by nearly 2% and currently trading above its 50-day moving average.
Stock Performance
Image Source: Zacks Investment Research
Wyndham is currently trading at a discount with a forward 12-month P/E ratio of 16.05, which is significantly lower than the industry average of 22.66. The company is currently trading at a discount compared to its industry peers, such as Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Marriott International, Inc. (MAR - Free Report) . This lower valuation might present an opportunity for WH investors, but it's essential to analyze the factors that could help the stock rebound.
Valuation
Image Source: Zacks Investment Research
Focus on AI Bodes Well
WH focuses on leveraging AI and innovation to transform operations, enhancing efficiency, productivity and overall guest experiences to foster growth.
The company has integrated AI across its operations to enhance efficiency and service quality. In its call centers, AI provides real-time coaching and handles calls, which allows agents more time to assist guests. The company implemented an easy-to-access chatbot within the mobile app that answers about 60% of common guest queries, thereby improving the guest experience and freeing staff for high-priority cases, such as quickly validating and awarding Wyndham Rewards points.
WH recently announced the rollout of a new guest engagement platform, Wyndham Connect, in North America. This initiative aims to enhance guest experiences and streamline owner operations through advanced technology. Management is optimistic and anticipates the initiative to foster strong guest relationships and financial gains in the upcoming periods. Currently, the company rolled out Wyndham Connect to nearly 2,000 hotels in North America.
Expansion Efforts
Wyndham is focused on expanding its geographic footprint and product offerings across all segments by leveraging the company’s diversified brand portfolio. This accretive aim of the company is backed by its disciplined capital allocation strategy, which encompasses investments in high-return businesses accompanied by strategic collaborations and buyouts.
On May 14, 2024, WH entered a partnership with Decameron All Inclusive Hotels & Resorts, significantly expanding its all-inclusive offerings to more than 50 resorts globally. This includes nine new resorts in Mexico, Panama and Jamaica, enhancing WH's product portfolio and global market presence while integrating these resorts into Wyndham Rewards for member benefits.
As of the first quarter, WH’s global development pipeline consisted of nearly 2,000 hotels and approximately 243,000 rooms, showcasing an 8% year-over-year increase. Among the total pipeline, about 58% of it is international.
Estimate Movement
Estimates for WH’s 2024 earnings have moved up from $4.25 to $4.26 in the past 30 days. The company’s earnings and sales in 2024 are expected to witness growth of 6.2% and 3.7%, respectively, year over year.
Conclusion
Investors might find Wyndham appealing for their portfolios, given its current Zacks Rank #2 (Buy) rating. The company stands to benefit from its robust expansion efforts and AI initiatives, positioning WH for growth. Additionally, the stock is trading at a favorable valuation. The combination of strategic growth plans and attractive pricing makes it a compelling consideration for potential investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.