Japan Hotel Reit Investment (8985) AI Stock Analysis

• Market Cap: ¥427.64B
• Dividend Yield: 4.54%
• Average Volume (3M): 20.35K
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.44
• Revenue Growth: 36.94%
• EPS Growth: 37.79%
• Country: JP
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Hotel & Motel
• EPS (TTM): 2504.00
• Shares Outstanding: 5,097,006
• 10 Day Avg. Volume: 18,736
• 30 Day Avg. Volume: 20,354
• PEG Ratio: 0.68
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 10.75
• P/FCF Ratio: -8.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥98,750.58
• Price Target Upside: 11.08% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥100,909 ▲(13.51% Upside)

The overall stock score of 76 reflects strong financial performance and positive technical indicators. The company's solid profitability and cash flow generation are key strengths, while the fair valuation provides a balanced investment opportunity. The absence of earnings call data and corporate events does not detract from the overall positive outlook.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective business expansion and increased market demand, supporting long-term profitability and stability.

Cash Flow Generation

Positive free cash flow growth enhances financial flexibility, enabling reinvestment in growth opportunities and reducing reliance on external financing.

Operational Efficiency

Improved margins demonstrate effective cost control and pricing power, contributing to sustainable profitability and competitive advantage.

Negative Factors

Rising Debt Levels

Increased debt levels may strain financial resources and limit strategic flexibility, potentially impacting long-term financial health if not managed.

High Capital Expenditures

Significant capital expenditures can pressure cash flow and profitability if expected returns are not achieved, affecting long-term financial stability.

Moderate Leverage

While leverage is currently manageable, it requires careful monitoring to prevent potential financial constraints that could impact future growth.

Japan Hotel Reit Investment Business Overview & Revenue Model

Company Description

Japan Hotel REIT Investment Corporation (Ticker: 8985) is a real estate investment trust (REIT) based in Japan that primarily focuses on investing in hotel properties across the country. The company aims to generate stable income and capital growth through the acquisition, development, and management of a diversified portfolio of hotels, including those catering to both domestic and international travelers. Japan Hotel REIT is committed to enhancing the value of its properties and delivering consistent returns to its investors.

How the Company Makes Money

Japan Hotel REIT generates revenue primarily through rental income from its hotel properties. The company leases its hotels to experienced hotel operators who manage the day-to-day operations, allowing Japan Hotel REIT to earn a steady stream of income without being directly involved in hotel management. Additionally, the REIT can benefit from long-term leases, which provide predictable cash flows. The company may also realize capital appreciation from property value increases over time. Key revenue streams include fixed rent payments and variable rent, which may be tied to the hotel operators' performance. Partnerships with leading hotel brands and operators enhance operational efficiency and attract a wider customer base, contributing to increased occupancy rates and revenue generation.

Japan Hotel Reit Investment Financial Statement Overview

Summary

Japan Hotel Reit Investment exhibits strong financial health with impressive revenue and profit growth, efficient cost management, and strong cash flow generation. The leverage is moderate but manageable, with notable strengths in profitability and cash conversion.

Income Statement

The company demonstrated strong revenue growth with a significant increase in total revenue from 26.57 billion JPY in 2023 to 33.48 billion JPY in 2024, marking a growth rate of 26%. The gross profit margin improved to 63.5% in 2024, indicating efficient cost management. The net profit margin also increased to 54.6%, reflecting high profitability. Additionally, the EBIT and EBITDA margins are robust at 62% and 79.5%, respectively, showcasing strong operational efficiency.

Balance Sheet

The balance sheet indicates a strong equity position with a debt-to-equity ratio of 0.72, suggesting moderate leverage. The return on equity is impressive at 6.4%, highlighting effective utilization of shareholder funds. The equity ratio stands at 56.8%, reflecting a solid equity base and financial stability. However, the company's total debt has increased, which could pose a potential risk if not managed properly.

Cash Flow

The free cash flow growth rate was robust, turning positive in 2024 with 22.76 billion JPY from negative figures in the previous year, indicating improved cash generation. The operating cash flow to net income ratio is 1.25, illustrating strong cash flow generation relative to net income. Additionally, the free cash flow to net income ratio is 1.25, underscoring effective cash conversion. However, the high capital expenditures in previous years highlight a potential risk if the investment returns do not materialize.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	42.86B	33.48B	26.57B	14.91B	13.63B	13.84B
Gross Profit	12.59B	21.24B	15.40B	6.12B	4.80B	5.12B
EBITDA	33.19B	26.63B	15.01B	9.14B	7.82B	7.94B
Net Income	23.60B	18.27B	13.13B	2.67B	1.30B	1.53B
Balance Sheet
Total Assets	555.76B	498.93B	429.96B	396.80B	394.32B	400.30B
Cash, Cash Equivalents and Short-Term Investments	30.46B	22.93B	17.69B	29.52B	22.84B	19.38B
Total Debt	269.58B	205.23B	175.23B	164.23B	164.75B	168.75B
Total Liabilities	279.18B	215.53B	184.98B	173.23B	172.78B	179.10B
Stockholders Equity	276.58B	283.40B	244.98B	223.57B	221.54B	221.20B
Cash Flow
Free Cash Flow	-99.91B	-42.50B	-20.85B	1.41B	7.99B	10.81B
Operating Cash Flow	30.49B	22.76B	17.78B	5.33B	11.68B	13.75B
Investing Cash Flow	-129.37B	-64.74B	-38.55B	-3.64B	-4.70B	-3.08B
Financing Cash Flow	107.75B	49.49B	19.77B	-2.17B	-5.54B	-16.46B

Japan Hotel Reit Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88900.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8985, the sentiment is Positive. The current price of 88900 is above the 20-day moving average (MA) of 81910.22, above the 50-day MA of 82322.38, and above the 200-day MA of 76715.98, indicating a bullish trend. The MACD of 530.62 indicates Negative momentum. The RSI at 63.35 is Neutral, neither overbought nor oversold. The STOCH value of 59.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8985.

Japan Hotel Reit Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8985	76 Outperform	¥427.64B	18.06	9.29%	4.54%	36.94%	37.79%
8955	72 Outperform	¥426.28B	21.74	7.12%	3.74%	78.62%	28.76%
8963	71 Outperform	¥498.55B	17.00	9.62%	5.82%	19.85%	8.60%
3463	68 Neutral	¥41.59B	8.88	―	11.36%	75.37%	134.79%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3287	62 Neutral	¥152.84B	24.02	―	4.18%	42.32%	15.73%

Japan Hotel Reit Investment Corporate Events

Japan Hotel REIT Posts Strong November on Robust Leisure Demand and Higher Room Rates

Japan Hotel REIT Investment Corporation reported strong operating results for November 2025 across its 28 variable-rent hotels, underlining robust demand in Japan’s hospitality market. Room operations continued to benefit from solid domestic and inbound leisure travel at higher price points, driving an 8.5% year-on-year increase in RevPAR, an 8.9% rise in average daily rates, and maintaining a high occupancy rate of 89.3%. Overall monthly revenues from these hotels climbed 8.0% from a year earlier, with food and beverage revenues up 6.9% on the back of healthy banquet and restaurant business, indicating broad-based strength in both lodging and ancillary services and supporting revenue growth on a cumulative basis versus 2024.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen107000.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.

Japan Hotel REIT Sees Strong October Performance with Positive Year-End Outlook

Japan Hotel REIT Investment Corporation reported a significant year-on-year increase of 20.8% in RevPAR for October 2025, driven by strong domestic and international leisure demand at high unit prices. Despite a slight decline in banquet sales, the overall revenue outlook for the year-end remains positive, with expectations of surpassing last year’s performance in November and December.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen100909.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.

Japan Hotel REIT Secures Interest Rate Stability with New Swap Contract

Japan Hotel REIT Investment Corporation has finalized an interest rate swap contract to stabilize the interest rates on its new loans, which were previously announced as part of a refinancing initiative with a green loan. This strategic move is expected to fix approximately 80% of the company’s interest-bearing debts at a stable rate, thereby reducing financial risk and potentially enhancing financial stability for stakeholders.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen100909.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.

Japan Hotel REIT Announces Green Loan Refinancing

Japan Hotel REIT Investment Corporation has announced a refinancing plan through a green loan to repay existing debts due on November 20, 2025. This strategic move aligns with JHR’s commitment to sustainability, utilizing the Green Finance Framework to support environmentally friendly projects, including properties like Hilton Tokyo Narita Airport and Hotel Nikko Nara. The refinancing does not significantly alter the company’s interest-bearing debts, maintaining a stable financial position with an expected fixed interest rate ratio of around 80%.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen100909.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.

Japan Hotel REIT Reports Strong September Performance

Japan Hotel REIT Investment Corporation reported strong performance for September 2025, with a notable 19.9% year-on-year increase in RevPAR, driven by high demand and pricing in the rooms department. Despite a decline in wedding revenue, the food and beverage department maintained stable revenue levels, indicating a robust operational performance across its 28 hotels.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen100909.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.

Japan Hotel REIT Proposes Amendments and Director Elections

Japan Hotel REIT Investment Corporation announced proposed amendments to its Articles of Incorporation and the election of directors at its upcoming General Meeting of Unitholders. The amendments aim to optimize the number of directors, adjust auditor remuneration, diversify borrowing sources, and align with regulatory changes. The election involves reappointing current directors and introducing new candidates to ensure continuity and compliance with legal requirements.

The most recent analyst rating on (JP:8985) stock is a Buy with a Yen100000.00 price target. To see the full list of analyst forecasts on Japan Hotel Reit Investment stock, see the JP:8985 Stock Forecast page.