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On Wednesday, Stifel analysts revised their outlook on PebbleBrook Hotel Trust (NYSE:PEB), currently trading at $8.41 with a market capitalization of $1.01 billion, lowering the price target to $13.25 from the previous $16.50. Despite the reduction, they maintained a Buy rating on the company’s stock. According to InvestingPro analysis, PEB appears undervalued, with analyst targets ranging from $9 to $21.50. The adjustment comes as Stifel updates its forecasts for the firm’s future funds from operations (FFO).
The analysts have revised their 2025 FFO estimate to $1.54, a decrease from the earlier projection of $1.61. The 2026 FFO estimate has also been adjusted to $1.63, down from the previously anticipated $1.69. These changes are based on the assumption of weaker current trends and are intended to reflect the broader macroeconomic uncertainty that is expected to persist. InvestingPro data shows the stock trading at attractive multiples, with a price-to-book ratio of 0.38x and an EV/EBITDA of 11.15x.
The revision in estimates particularly affects the second quarter of 2025, with Stifel taking a more conservative stance due to the current market conditions. The firm also anticipates that the second half of 2025 and the full year of 2026 will face challenges due to the uncertain economic landscape.
Stifel’s commentary highlighted the need to update their estimates to better align with the observed weaker trends and the prevailing macroeconomic uncertainty. This suggests a cautious approach to PebbleBrook’s performance in the near to medium term, while still seeing long-term value in the stock, as indicated by the maintained Buy rating.
PebbleBrook Hotel Trust, which operates as a real estate investment trust (REIT), focuses on upscale, full-service hotels located in urban markets in major gateway cities. The company’s portfolio includes properties across the United States, and its performance is closely tied to the health of the hotel and hospitality industry, which can be sensitive to economic shifts. Notably, InvestingPro analysis reveals the company has achieved a perfect Piotroski Score of 9, indicating strong financial health, with liquid assets exceeding short-term obligations and a current ratio of 1.55x. For deeper insights into PEB’s valuation and 12 additional ProTips, consider exploring InvestingPro’s comprehensive research report.
In other recent news, Pebblebrook Hotel Trust reported mixed financial results for the fourth quarter of 2024. The company’s earnings per share (EPS) came in at -0.51, falling short of analyst expectations of -0.38. However, Pebblebrook exceeded revenue forecasts by reporting $337.6 million, surpassing the anticipated $324.03 million. The company also completed a $525 million redevelopment program, which contributed to its revenue performance. Strong results were noted particularly in resort properties, with California resorts leading the way. Additionally, Pebblebrook’s adjusted EBITDA increased by 0.8% to $359.2 million, and adjusted funds from operations (FFO) per diluted share grew by 5% to $1.68. Looking forward, Pebblebrook anticipates industry RevPAR growth of 1% to 3% in 2025, despite potential revenue impacts from the Los Angeles wildfires. In terms of analyst activity, there were no specific upgrades or downgrades reported, but the company remains focused on enhancing operational efficiencies and market share expansion.
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