NEW YORK (TheStreet) -- A slate of larger hotel brands set to report earnings in the next two weeks amid a generally positive outlook on the hotel industry are ripe to send their stocks surging, if the first few hotel company earnings this season are any indication.
Wyndam stock closed 8.7% higher at $88, up close to 3% on the year, Tuesday after it reported adjusted earnings per share 90 cents, up 23% from 73 cents per share last year and above the Street view of 84 cents per share, according to Thomson Reuters estimates.
Meanwhile, Starwood closed up 6.6% to $76 after it surprised investors with earnings of 97 cents a share, firmly beating the Street view of 76 cents per share.
Building on 2014 momentum, the hotel industry is benefiting from increased hotel rates and revenue per room in 2015, according to PricewaterhouseCoopers, which expects a 7.4% increase in revenue per available room this year to be driven by increased average daily rates. The firm expects occupancy levels of U.S. hotels to reach those not seen since 1984.
TheStreet Ratings team rates STARWOOD HOTELS&RESORTS WRLD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate STARWOOD HOTELS&RESORTS WRLD (HOT) 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 reasonable valuation levels, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: HOT Ratings Report