Spinoff Report
WH: Exiting Portfolio on Lack of Near-Term Catalysts
Wyndham Hotels & Resorts, Inc. (WH) has continued to demonstrate growth resulting from the separation from parent Wyndham Destinations, Inc. (WYND) and the addition of La Quinta to its portfolio. That said, increased competition in the midscale and economy hotels space (particularly from Airbnb) has slowed that growth moving forward, dampening near-term catalysts. Longer-term holders can look to an international expansion and WH's edge over competitors in its tech implementation.

  • Deleveraging Takes Time / Net Debt of 3.2x Remains a Key Concern (Peers' Average of 2.6x)
  • Impressive RevPAR (Revenues Per Available Room) / Muted Free Cash Flow Generation / Growth Slowing in Hotel Space
  • Key Tech Implementation & Rewards Program (16.7% Payback to Customers) Provides Edge Ofer Peers
  • Lack of Near-Term Catalyst / Long-Term Growth Through International Expansions & Capital Structure Alignment
  • Revised Target Price / WH Exits the ESR Model Portfolio at the End of Today's (May 10) VWAP
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