Wyndham’s (WYN) second quarter 2010 earnings were ahead of the Zacks Consensus Estimate, primarily due to betterthan- expected business in Vacation Exchange and Rentals, along with a lower effective tax rate and favorable impact of foreign currency translation.The company has also raised its fiscal year 2010 outlook.
The company provides various hospitality products and services to individual consumers and businesses. Going forward, we expect Wyndham to benefit from its repositioning to a more fee-for-service based business and strategic focus on Vacation Exchange and Rental business.
Moreover, with lower cash taxes, we expect the company to generate strong free cash flow and return the capital to shareholders. Additionally, considering the reviving lodging industry and increasing occupancy rate, we expect the top-line improvement to gain momentum, going forward. Hence, we are upgrading the stock from Neutral to Outperform.
WYNDHAM WORLDWD (WYN): Free Stock Analysis Report
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