Wyndham Hotels (WH) PT Raised to $92 at Baird, 'remains our Best Idea'

Baird analyst Michael Bellisario raised the price target on Wyndham Hotels (NYSE: WH) to $92.00 (from $88.00) while maintaining a Outperform rating.

The analyst commented: "We expect Wyndham's net unit growth and RevPAR growth to improve in 2025 driven by (1) more ECHO Suites deliveries, which could add ~30 bps to 2025 net unit growth, and (2) a more supportive leisure demand backdrop, particularly domestically, given lower interest rates, a solid employment outlook, and a steady/more favorable economic backdrop. Given that near-term U.S. RevPAR trends have remained sluggish (i.e., leisure continues to normalize), we do not expect 3Q24 top-line performance to surprise to the upside. Looking ahead, Florida and Texas are Wyndham's two largest exposures domestically, and RevPAR growth could experience a modest boost in 4Q24 (and perhaps into 1Q25) given the recent hurricanes and the associated post-storm clean-up, insurance, and rebuilding/construction demand; we assume Wyndham's domestic RevPAR growth in 4Q24 will experience an approximate 50 bps lift. Fundamentally, we remain most encouraged by Wyndham's net unit growth momentum when looking out to 2025 and beyond. We view valuation as attractive, and we believe risk-reward over the intermediate-term is favorable at current levels – WH remains our Best Idea."

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