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Investing.com - Stifel raised its price target on Pebblebrook Hotel Trust (NYSE:PEB) to $14.00 from $13.00 while maintaining a Buy rating on the hotel real estate investment trust. The company, currently valued at $1.42 billion, has shown strong momentum with double-digit returns over the past three months, according to InvestingPro data.
The price target increase follows Pebblebrook’s announcement of a $400 million issuance of 1.625% Convertible Senior Notes due 2030 through a private placement. This move comes as InvestingPro analysis shows the company trading below its Fair Value, with a healthy current ratio of 1.78 indicating strong short-term liquidity position.
The notes will have an initial conversion rate of 62.9129 per $1,000 principal, equating to a conversion price of approximately $15.89, representing a 37.5% conversion premium based on the previous day’s closing price.
Stifel noted that negotiated caps increase the potential conversion price to $24.43 per share, which aligns with the upper end of Pebblebrook’s current net asset value per share.
The research firm views this debt issuance as positive for Pebblebrook, stating it removes a significant overhang from the stock, with the firm’s financial projections increasing due to both share repurchases and slight interest savings.
In other recent news, Pebblebrook Hotel Trust reported its second-quarter 2025 earnings, showcasing a mixed performance. The company recorded earnings per share (EPS) of $0.06, which was slightly below the forecasted $0.07. However, it exceeded revenue expectations with $407.54 million compared to the anticipated $398.34 million. In a separate development, Pebblebrook announced the pricing of a $400 million convertible senior notes offering due 2030, with net proceeds estimated at approximately $389.7 million. This offering includes an initial $350 million and an additional $50 million following the full exercise of the initial purchasers’ over-allotment option. The company plans to use these proceeds to repurchase some of its existing convertible notes and approximately $50 million of its common shares. Truist Securities recently raised its price target for Pebblebrook Hotel Trust to $11 from $9 while maintaining a Hold rating. The firm also increased its 2025 Adjusted EBITDAre forecast and its AFFO per share estimate.
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