In a report released yesterday, Dori Kesten from Wells Fargo maintained a Hold rating on RLJ Lodging (RLJ – Research Report), with a price target of $12.50.
Dori Kesten has given his Hold rating due to a combination of factors affecting RLJ Lodging’s recent performance and outlook. The company’s first-quarter EBITDA fell slightly short of market expectations, although it was consistent with internal forecasts, indicating a level of anticipated performance. While RLJ’s funds from operations per share met the consensus, its adjusted EBITDA was marginally below by 2.1%. Despite this, RLJ reiterated its full-year 2024 guidance for key financial metrics, suggesting stability in its future expectations which align with consensus estimates at their midpoints.
Additionally, RLJ’s comparable Revenue per Available Room (RevPAR) showed modest growth and met management’s projections, although it was below the more optimistic market expectation. The urban-heavy portfolio saw improved occupancy, but flat rates, and a decline in hotel EBITDA margins that was slightly greater than anticipated. While the company did not repurchase shares in the first quarter, its capital allocation strategy included handling debt maturities and planning for renovations with potential EBITDA upside. These mixed results and forward-looking strategies contribute to the rationale behind maintaining a Hold rating, implying that the stock is adequately valued at present, with expected performance largely priced in.
In another report released on April 17, Barclays also maintained a Hold rating on the stock with a $13.00 price target.
RLJ’s price has also changed moderately for the past six months – from $9.350 to $10.960, which is a 17.22% increase.
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RLJ Lodging (RLJ) Company Description:
RLJ Lodging Trust is a real estate investment trust, with interests in hotels. It operates through the following hotel brands: Marriott, Hilton, and Hyatt or Wyndham . The company was founded by Robert L. Johnson on January 31, 2011 and is headquartered in Bethesda, MD.
