October 3, 2023

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Wyndham, Hilton Back Off Breakouts Amid Strong Hotel Earnings; Hyatt Dives Late

Hyatt Hotels (H) posted a far-worse-than-feared loss for the fourth quarter late Wednesday. Hilton Worldwide (HLT) delivered a mixed Q4 report early Wednesday and Choice Hotels International (CHH) topped views.


On Tuesday, Wyndham Hotels & Resorts (WH) and Marriott International (MAR) beat Q4 estimates despite the omicron surge. However, Wyndham’s outlook came in light.

The Covid omicron variant weighed on travel in the December quarter, but hotel stocks have been rallying as cases fall and mask mandates wane.

Hyatt stock sank late. Wyndham Hotels stock and Hilton stock broke out briefly Wednesday, but closed below their entries. Marriott stock rose through its buy zone on Tuesday. Choice Hotels stock continues to work on a buy point.

Hyatt Hotels Earnings, Hyatt Hotels Stock

Estimates: Analysts expectrf Hyatt Hotels to narrow losses to 17 cents per share from a net loss of $1.77 a year ago. Sales were seen rebounding 155% to $1.081 billion.

Results: Hyatt lost $2.78 per share. Revenue of $1.076 billion includes two months of performance of its Apple Leisure Group acquisition.

In Q4, revenue per available room or RevPAR increased to $96.75 but decreased 26.1% vs. Q4 2019. The company saw some RevPAR softness in January due to the omicron variant.

Hyatt stock tumbled 6.4% to 100 late Wednesday after closing up a fraction. Hyatt Hotels stock cleared a 99.10 alternate entry Tuesday, a dime above the Jan. 10 high. The RS line for H stock hit a fresh high Wednesday.

Hilton Worldwide Earnings, Hilton Worldwide Stock

Estimates: Analysts expected Hilton Worldwide earnings of 73 cents per share vs. a loss of 10 cents a year ago. Sales were seen bouncing 103% to $1.807 billion.

Results: Hilton reported adjusted EPS of 72 cents, just shy of the analyst target. Sales rose 106% to $1.84 billion.

New variants of the virus have had some short-term impact, CEO Christopher Nassetta said in a release. But “we are optimistic about the acceleration of recovery across all segments during 2022,” he added.

RevPAR increased 104.2%, on a currency neutral basis, in Q4 vs. the year-ago quarter. But it was down 13.5% vs. Q4 2019.

Hilton achieved 5.6% net room growth in 2021 and expects a further 5% increase in 2022.

Shares of Hilton fell just over 1% to 156.34 on Wednesday after reaching 160.96 soon after the open. Hilton Worldwide stock briefly topped a 159.31 entry, a dime above the Jan. 4 peak, Wednesday. The RS line hit a fresh high as HLT stock broke out.

Choice Hotels Earnings, Choice Hotels Stock

Estimates: Analysts saw Choice Hotels earnings rebounding 64% to 84 cents per share. Revenue was expected to bounce 42% to $274.9 million.

Results: Choice Hotels earnings per share leapt 94% to 99 cents. Revenue climbed 47% to $284.6 million.

Domestic RevPAR growth increased 13.9% in Q4 vs. the same quarter of 2019. It increased 2.2% for the full year vs. 2019. In terms of that key metric, Choice topped full-year 2021 guidance and outperformed the industry by 19 percentage points, the company said in release.

For 2022, Choice management expects continued growth in RevPAR and adjusted EBITDA vs. 2021. It did not offer specific guidance, citing “still somewhat uncertain” Covid recovery trends.

CHH stock lost 2.2% to 147.11 Wednesday, back below the 50-day. Choice Hotels stock is carving a flat or cup base with a 157.56 buy point. Shares could form a handle after Thursday, offering a lower entry of 153.81. The RS line for CHH stock made a fresh high Tuesday ahead of a potential breakout.

Wyndham Hotels Earnings, Wyndham Hotels Stock

Estimates: Analysts expected Wyndham earnings to rebound 667% to 54 cents per share. Sales were seen bouncing 30% to $384.7 million.

Results: Wyndham earnings vaulted 886% to 69 cents per share. Revenue surged 32% to $392 million. U.S. RevPAR, for the quarter exceeded 2019 levels by 9%, growing 58% vs. 2020.

“New Covid variants did not impact our domestic, drive-to leisure travel business,” CEO Geoffrey Ballotti said in an earnings release. “And consumer demand portends a very busy Spring Break for our franchisees.”

Stock Of The Day: Hotel Operator Nears Buy Point

Entering 2022, Wyndham is seeing strong occupancy trends in the U.S., he said. It also enters the year with “our largest ever development pipeline,” he added.

For 2022, the company is forecasting adjusted diluted EPS of $3.28-$3.40. At the midpoint of $3.34, the outlook is below analysts’ expectations for $3.44 on average, FactSet shows.

Also for 2022, Wyndham forecasts net rooms growth of 2% to 4%. It also sees RevPAR growth of 12%-16% vs. 2021, which is consistent with 2019 levels.

Shares of Wyndham Hotels ended almost flat at 90.26 in up-and-down Wednesday action, ranging from a low of 88 to a high of 93.72. Wyndham Hotels stock topped a 91.51 flat-base buy point intraday. The RS line for WH stock struck a fresh high Wednesday, a positive sign as a stock breaks out.

Marriott Earnings, Marriott Stock

Estimates: Wall Street saw Marriott earnings rebounding 735% to $1 per share, on an 85% revenue bounce to $4.014 billion, according to FactSet.

Results: Marriott earnings per share skyrocketed 983% to $1.30 a share, with revenue spiking 105% to $4.45 billion.

Worldwide, RevPAR shot up 124.5% in Q4 vs. the year-ago quarter on a constant dollar basis. It declined 19% worldwide vs. Q4 2019.

In 2021, Marriott grew net rooms 3.9% from 2021.

Omicron caused a temporary setback in global demand recovery in January, CEO Anthony Capuano said in the Marriott earnings release. But new bookings have rebounded to pre-Omicron levels, the release added. “We are optimistic that the global recovery will progress meaningfully throughout 2022,” Capuano said.

For 2022, Marriott expects net rooms growth of 3.5%-4%. It could begin returning cash to shareholders later this year. The company did not offer specific guidance in the release, citing Covid-19 uncertainty.

Shares of Marriott International rose 1.1% to 183.26 on the stock market today. Marriott stock moved further out of range from a 171.25 cup-with-handle buy point. The buy range goes to 179.81. Marriott stock first cleared that entry Feb. 8 and regained it Monday ahead of earnings.

The relative strength line for MAR stock has risen to a 52-week high, according to MarketSmith chart analysis. However, the RS line remains well below all-time highs chalked up in 2019.

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Travel stocks are rallying broadly as states including California prepare to end mask mandates. The number of new Covid-19 cases in the U.S. also is declining from a January peak. On Tuesday, cruise line operators Royal Caribbean (RCL) and Norwegian Cruise Lines (NCLH) each rallied 4%-6%. American Airlines Group (AAL) jumped 8%.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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