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Tuesday, Ryman Hospitality Properties (NYSE:RHP) received a reiterated Buy rating and a $127.00 price target from Truist Securities. The firm’s endorsement came following RHP’s announcement that it plans to acquire the JW Marriott Phoenix Desert Ridge Resort & Spa for $865 million from Trinity Investments. The transaction, which equates to approximately $911,000 per key for the 950-room resort, is anticipated to positively impact Ryman’s adjusted funds from operations (AFFO) per share in 2026, which will be the first full calendar year of ownership. The company’s strong financial position, with liquid assets exceeding short-term obligations and an EBITDA of $752.12 million in the last twelve months, supports this strategic expansion.
Truist Securities expressed that the move to acquire a property in the greater Phoenix area was expected, as RHP had previously shown interest in expanding into this region. The acquisition is seen as a strategic follow-up to the successful purchase of the JW Marriott San Antonio Hill Country in 2023. This expansion into the Southwest is part of RHP’s broader strategy to diversify its geographic presence. Analysts at Truist consider the Phoenix resort a logical and beneficial addition to RHP’s portfolio, aligning well with the company’s long-term objectives.
The resort is perceived by RHP as ticking all the boxes for a sound investment, and Truist commends the company for its decision to proceed with an acquisition that is projected to be accretive to AFFO/share from the outset. However, Truist analysts also highlighted potential concerns regarding the timing of the acquisition amidst uncertainties in the lodging cycle. They pointed out risks to both leisure and group demand, with the latter often being the last to decline in a lodging cycle.
Despite these concerns, RHP remains confident in their strategy. The acquisition is part of their ongoing effort to enhance shareholder value by investing in properties that meet their stringent criteria for growth and revenue generation. Ryman Hospitality Properties, currently offering an attractive 4.64% dividend yield, is a real estate investment trust specializing in upscale convention center resorts and country music entertainment experiences. For deeper insights into RHP’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Ryman Hospitality Properties, Inc. reported strong financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share of $1, significantly exceeding the projected $0.69, and reported revenue of $587.28 million, surpassing the forecast of $546.4 million. These results highlight the company’s robust performance in its hospitality segment, which saw record revenue and adjusted EBITDAre. Additionally, Ryman Hospitality announced a definitive agreement to acquire the JW Marriott Phoenix Desert Ridge Resort & Spa for $865 million, a strategic move anticipated to enhance its portfolio and align with its group strategy. The acquisition will be funded through a combination of debt, a public stock offering, and cash. Moreover, Ryman Hospitality launched a public offering of 2,300,000 shares of its common stock, with an option for underwriters to purchase additional shares, to support the acquisition costs. In governance news, shareholders approved key proposals at the company’s annual meeting, including the election of directors and executive compensation. These developments underscore Ryman Hospitality’s strategic growth initiatives and strong financial performance.
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