Hello, this is Andy.
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President Trump's tariffs have finally been implemented. As a result, global stock prices continue to decline ;;;;;
It seems that it will take a considerable amount of time for things, including supply chains, to stabilize.
Furthermore, inflation is also expected to progress, which raises the question: will interest rates remain high?
If interest rates stay high, the impact on the economy will be significant, increasing concerns about stagflation.
Well, let's see how things unfold... ;;;
Since this volatility is likely to continue, I want to set target stock prices as early as possible.
This time, the focus is on Wyndham Hotels & Resorts (WH).
Although this hotel group is not very familiar in Japan, it is a major global company.
Some of its key hotel brands include:
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Ramada
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Days Inn
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Howard Johnson
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Wyndham
First, let’s take a look at the financial performance up to 2024.
During the COVID-19 pandemic, the company fell into the red, but from 2021 onwards, it made a V-shaped recovery, achieving per-share earnings that surpassed pre-pandemic levels.
From 2021 to the latest figures in 2024, the company has continued to steadily grow its revenue and profit.
Although it is hardly mentioned in Japan, it is a company that has been consistently increasing its profits.
Now, a major market crash will come sooner or later.
To prepare for that, I would like to establish a target stock price as a benchmark for deciding whether to buy.
The fundamental approach to setting this target stock price is based on the following book.
Basic Approach:
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Estimate the EPS and PER for five years into the future based on past performance.
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Use the projected EPS and PER to calculate the stock price, then set the target stock price at half of that value.
For Wyndham Hotels & Resorts, since it was spun off in 2018, relying solely on pre-COVID performance as a benchmark is challenging.
Therefore, for this analysis, I will calculate a reference target stock price that takes into account the entire COVID period.
2029 Forecast Values
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Earnings per Share (EPS): 6.35
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Price-to-Earnings Ratio (PER): 11.68
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Stock Price Projection: 74
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Target Stock Price: 37
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Current Stock Price: 92
At this moment, stock price adjustments have already begun under the pretext of Trump's tariffs.
From the current stock price, a 60% decline would bring it down to $37.
A 60% correction would be on the scale of the Lehman Shock, but in the context of a major market crash, setting this as a target price seems reasonable.
That concludes my introduction to Wyndham Hotels & Resorts (WH) and the target stock price analysis.
During a major crash, everyone will likely panic. However, by setting target stock prices in advance, we can strengthen our grip on the situation and position ourselves to seize opportunities. I will continue refining target price settings for better preparation.
