Nomura Securities Cuts Price Target on Wyndham Worldwide (WYN) to $69
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Nomura Securities maintained a Neutral rating on Wyndham Worldwide (NYSE: WYN), and cut the price target to $69.00 (from $75.00) as headwinds persist. Nomura expects headwinds related to defaults and lower VPG in WYN’s timeshare business to negatively affect EBITDA and investor sentiment in 2017.
Analyst Harry Curtis commented, "Despite exploring legal remedies and enhancing consumer outreach, WYN’s loan-loss reserve continues to climb. During 3Q, WVO’s loan-loss provision increased to 19.1%, +100bps sequentially and +440bps YoY. To some investors, this implies that the third-party agitators responsible for driving the spike in defaults are operating within the limits of the law and that the crux of the problem is WYN’s product. Seemingly lending support to that view, recent satisfaction scores indicate ~20% of owners are unsatisfied with their timeshare vacation, similar to 3Q’s reserve rate. We expect default rates of 18%-20% throughout 2017."
Shares of Wyndham Worldwide closed at $63.32 yesterday.
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