On Friday, PebbleBrook Hotel Trust (NYSE:PEB) stock received an upgrade in its stock rating by Stifel from 'Hold' to 'Buy.' Accompanying this upgrade, the firm also increased the price target for the hotel trust's shares to $15.00, up from the previous target of $14.75.
The adjustment in the stock's outlook was prompted by the analysis of its performance relative to its industry peers. According to Stifel's assessment, PebbleBrook Hotel Trust's shares have not performed as well as those of other companies in the lodging sector year-to-date, with a decline of 18.5% compared to the sector's average drop of 8.7%.
Stifel's new price target of $15.00 for PebbleBrook Hotel Trust reflects a valuation based on a 12.1 times multiple of the company's projected adjusted EBITDA for the year 2026. This target suggests a potential upside from the current trading levels of the company's shares.
The firm's rationale behind the upgrade was detailed in a statement, where the analyst mentioned the specific metrics used to arrive at the new rating and price target. Stifel's positive stance on the stock is grounded in the expectation of PebbleBrook's future financial performance.
The upgrade is expected to draw attention from investors as they consider the potential growth and value prospects of PebbleBrook Hotel Trust in the context of the broader lodging industry. The company's stock performance will continue to be watched closely by market participants following this updated analyst recommendation.
"In other recent news, PebbleBrook Hotel Trust has seen noteworthy developments. The company reported a modest increase in revenue per available room (RevPAR) and exceeded financial expectations in its third-quarter earnings call.
The same-property RevPAR increased by 2.2%, and total RevPAR rose by 2.7%. Out-of-room spending also grew by 3.8%, and same-property hotel EBITDA reached $110.8 million, surpassing guidance by $8.7 million.
In addition to these earnings highlights, the company underwent a brand conversion, rebranding the Delfina Santa Monica Hotel to Hyatt Centric, with a $16 million refresh completion expected by Q1 2025. PebbleBrook also issued $400 million in senior unsecured notes and extended bank term loans to 2029, with no significant debt maturities until December 2026.
Compass Point, an analyst firm, upgraded PebbleBrook's stock rating from Neutral to Buy. This upgrade was made despite the company's lag behind its sector peers. The firm maintains a steady price target of $17.00, reflecting the stock's decline over the year but indicating belief in the company's potential for recovery and growth. These recent developments highlight PebbleBrook's steady growth amid challenges and its potential for future performance."
InvestingPro Insights
To complement Stifel's upgrade of PebbleBrook Hotel Trust (NYSE:PEB), recent data from InvestingPro offers additional context for investors. Despite the year-to-date decline noted by Stifel, PEB's stock has shown resilience with a 6.24% total return over the past year. The company's price-to-book ratio of 0.57 suggests it may be undervalued relative to its assets, aligning with Stifel's bullish outlook.
InvestingPro Tips highlight that PEB has maintained dividend payments for 15 consecutive years, indicating a commitment to shareholder returns despite challenging market conditions. Additionally, the company's liquid assets exceed short-term obligations, which may provide financial flexibility as it navigates the current economic landscape.
For investors seeking a deeper analysis, InvestingPro offers 5 additional tips that could further inform investment decisions regarding PebbleBrook Hotel Trust.
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