The firm said it lowered its rating on the hospitality company as it believes Wyndham has numerous potential negative catalysts.
"We see a host of potential negatives on the horizon for a universally loved stock trading at peak multiples," Deutsche said.
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The firm listed "slowing benefits from timeshare loan loss reversals," a heightened foreign exchange risk, "relative stagnation within the exchange and rentals segment," and "a need for incremental spend on timeshare inventory/marketing" as reasons for its downgrade.
Deutsche Bank reduced its price target on Wyndham to $69 from $70.
Shares of Wyndham closed at $83.79 on Friday afternoon.
Separately, TheStreet Ratings team rates WYNDHAM WORLDWIDE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate WYNDHAM WORLDWIDE CORP (WYN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WYNDHAM WORLDWIDE CORP has improved earnings per share by 17.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WYNDHAM WORLDWIDE CORP increased its bottom line by earning $3.22 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($4.47 versus $3.22).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 10.2% when compared to the same quarter one year prior, going from $186.00 million to $205.00 million.
- You can view the full analysis from the report here: WYN Ratings Report