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RLJ Lodging Trust (RLJ)
NYSE:RLJ
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RLJ Lodging
(NYSE:RLJ)
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Rating:62Neutral
Price Target:
$8.50
â–²(12.58% Upside)
Action:ReiteratedDate:02/28/26
Overall score reflects (1) solid but moderating fundamentals—strong cash flow offsets weaker 2025 profitability and cyclical lodging risk, (2) a constructive earnings outlook and execution narrative from the latest call, (3) neutral technicals, and (4) a valuation headwind driven by an extremely high P/E despite a strong dividend yield.
Positive Factors
Cash-generation resilience
Consistently positive operating and free cash flow through 2022–2025 provides enduring financial flexibility. Strong cash generation funds capex, dividends and buybacks, cushions cyclicality, supports refinancing and reduces reliance on equity issuance for near-term capital needs.
Refinanced maturities and liquidity
Refinancing activity that pushes material maturities out to 2029+ and secures a larger revolver materially lowers near-term refinancing risk. Ample liquidity and many unencumbered hotels afford strategic optionality for asset recycling, capex, and shareholder returns over the medium term.
Conversions, renovations and non-room growth
A demonstrated track record of accretive conversions and renovation-led RevPAR lifts, alongside above‑trend non-room revenue growth, indicates scalable asset-improvement capabilities. These structural margin and top-line enhancements can sustainably boost hotel-level returns and FFO over multiple years.
Negative Factors
2025 revenue and margin compression
A meaningful 2025 revenue decline and sharp net margin compression highlight sensitivity to weaker demand and cost/interest pressures. Sustained top-line softness or higher operating costs would erode FFO, limit reinvestment and constrain durable dividend/support for shareholder returns.
Moderate leverage and 2025 debt data gap
Historic leverage near industry-typical but material (~1.0 D/E) coupled with a missing 2025 debt datapoint increases uncertainty about true balance-sheet headroom. Sizeable outstanding debt makes the company sensitive to rate swings and cash-flow shortfalls despite recent refinancings.
Cyclical demand and group/government exposure
Concentration in urban and group-dependent business exposes earnings to macro and episodic shocks (government shutdowns, group softness). These structural demand swings can produce volatile quarterly EBITDA and pressure margins and FFO until sustained travel recovery occurs.
RLJ Lodging (RLJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.15B
Dividend Yield7.76%
Average Volume (3M)1.81M
Price to Earnings (P/E)39.1
Beta (1Y)0.87
Revenue Growth-0.58%
EPS Growth-83.32%
CountryUS
Employees73
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-0.04
Shares Outstanding151,917,510
10 Day Avg. Volume1,884,298
30 Day Avg. Volume1,807,096
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)0.51
Price to Sales (P/S)0.83
P/FCF Ratio9.50
Enterprise Value/Market Cap2.65
Enterprise Value/Revenue2.26
Enterprise Value/Gross Profit-261.19
Enterprise Value/Ebitda9.46
Forecast
1Y Price Target
$7.67Price Target Upside1.59% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)-0.02
Revenue Forecast (FY)$1.37B
RLJ Lodging Business Overview & Revenue Model
Company DescriptionRLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.
How the Company Makes MoneyRLJ Lodging generates revenue primarily through the operation of its hotel properties, which includes income from room rentals, food and beverage sales, and other ancillary services offered to guests. The company benefits from a diverse portfolio of hotels, allowing it to capitalize on varying market demands and trends. Key revenue streams include daily room rates and occupancy levels, which are influenced by factors such as location, brand affiliation, and seasonal travel patterns. Additionally, RLJ Lodging often enters into management agreements with established hotel operators, which can provide a steady income stream while minimizing operational risks. Partnerships with major hotel brands enhance its visibility and market reach, further contributing to its earnings potential.
RLJ Lodging Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call emphasized multiple operational and financial positives—outperformance versus expectations, meaningful non-room revenue growth (+7.2% Q4), strong conversion/renovation returns (recent conversions +15% RevPAR), robust liquidity and proactive refinancing, and active capital returns—while acknowledging near‑term demand headwinds from a government shutdown, modest Q4 RevPAR contraction (-1.5%), group softness, and manageable cost and interest pressures. Management provided constructive 2026 guidance (RevPAR +0.5%–3%) and positioned the portfolio to benefit from urban market tailwinds and special events, indicating stronger confidence in the outlook despite short-term noise.Q4-2025 Updates
Positive Updates
Quarter Results Ahead of Expectations
Q4 comparable hotel EBITDA of $87.8M, adjusted EBITDA of $80.4M, and adjusted FFO per diluted share of $0.32; results came in ahead of guidance despite a choppy operating environment.
Top-Line Metrics (Q4)
Q4 occupancy 68.7%, ADR $199, RevPAR $137, representing a RevPAR contraction of 1.5% versus prior year (comprised of occupancy down 0.9% and ADR down 0.7%).
Strong Non-Room Revenue Performance
Non-room revenues grew 7.2% in Q4, outperforming RevPAR by nearly 900 basis points and contributing to total revenue growth of 0.2% for the quarter; company expects total revenue to outpace RevPAR in 2026 by ~50 bps.
Urban Market Outperformance
Urban markets drove performance with notable RevPAR growth in San Francisco CBD +52% (Q4), Northern California +18.5%, Denver CBD +10.1%, and New York +4.7%.
Conversion & Renovation Ramp
Four most recent conversions achieved 15% RevPAR growth for the full year; conversions on average outperformed the broader portfolio by nearly 700 basis points; completed high-impact renovations in Waikiki and Deerfield Beach delivered December RevPAR growth of +12% and +10%, respectively.
Balance Sheet Strength & Liquidity
Addressed near‑term maturities and completed refinancing package: revolver maturity extended to 2031, term loans upsized/added, mortgage refinancing; no maturities before 2029 post transactions; >$1.0B liquidity, $600M undrawn revolver, 84 of 92 hotels unencumbered, weighted average interest rate 4.673%, and ~73% of debt fixed or hedged.
Disciplined Capital Allocation & Shareholder Returns
Returned $120M to shareholders in 2025 via buybacks and dividend; repurchased 300,000 shares for $28.6M; continue to pay a quarterly dividend of $0.15 per share.
Attractive Asset Recycling
Sold properties (three reported) for $73.7M aggregate at an accretive multiple of 17.7x projected 2025 hotel EBITDA (including required CapEx), recycling proceeds into paydown, refinancing and share repurchases.
2026 Guidance
Full-year 2026 guidance at midpoint assumes: comparable RevPAR growth 0.5%–3% (midpoint balanced between rate and occupancy), comparable hotel EBITDA $344M–$374M, corporate adjusted EBITDA $312M–$342M, adjusted FFO per diluted share $1.21–$1.41, CapEx $80M–$90M, and net interest expense $101M–$103M.
F&B & Margin Improvements
Full-year F&B margin improvement of ~120 basis points driven by beverage-centric ROI initiatives, renovated outlets and increased group spend.
Negative Updates
Government Shutdown Impacted Demand
Protracted government shutdown materially weighed on Oct/Nov results, primarily impacting DC and Southern California; government-related business was ~3% in a normalized year and was down approximately 20% in the prior year.
RevPAR Contraction and Soft Early-Year Trend
Q4 RevPAR declined 1.5% year-over-year; January RevPAR was down 1.9%; company expects Q1 to be the softest quarter (Q1 adjusted EBITDA expected to represent ~22% of full-year outlook).
Group Demand Pressure in Quarter
Group revenues were down 3% in Q4 as in-quarter-for-quarter demand was artificially impacted by the shutdown, despite group ADR growth of 4%.
Operating Cost and Wage Pressure
Total operating costs were up 0.8% in Q4 and 1.6% for the full year (2.1% excl. $4.7M tax benefit); 2026 expense assumptions: ~3% overall expense growth (variable ~2%, fixed ~4%) with wage and benefits growth of 3%–4%.
Higher Interest Rate Environment When Refinancing
Refinancings addressed maturities but required refinancing of some lower-cost debt in a higher interest rate environment—management expects minimal increase in annual interest expense but the company still carries $2.2B of debt and will use delayed draws to manage payoff of $500M senior notes.
Renovation Disruption in Prior Year
2025 included high‑occupancy renovations that caused operating disruptions; management expects fewer disruption headwinds in 2026 but noted that last year’s renovations did create near-term performance drag.
Company Guidance
RLJ guided 2026 on the assumption the current operating environment continues, calling for comparable RevPAR growth of 0.5%–3% (midpoint balancing rate and occupancy), comparable hotel EBITDA of $344M–$374M, corporate adjusted EBITDA of $312M–$342M and adjusted FFO per diluted share of $1.21–$1.41 (assuming no additional share repurchases); they forecast capital expenditures of $80M–$90M, cash G&A of $32.5M–$33.5M, net interest expense of $101M–$103M, and expect total revenue growth to outpace RevPAR by roughly 50 basis points, with first‑quarter adjusted EBITDA representing about 22% of the full year (January RevPAR was down 1.9%), and the outlook assumes no further acquisitions, dispositions or balance‑sheet activity beyond what’s been completed (note adjustments for asset sales and a $4.7M non‑recurring property tax credit).RLJ Lodging Financial Statement Overview
Summary
Financials are mid-tier: profitability recovered in 2022–2024 but softened in 2025 (revenue down ~10% YoY and net margin compressed), while cash generation remains a clear strength with positive, resilient operating and free cash flow. Balance-sheet assessment is mixed given moderate leverage historically and an apparent 2025 debt data gap.Income Statement
RLJ’s earnings profile shows a clear recovery from the 2020–2021 losses to consistent profitability in 2022–2024, supported by solid EBITDA margins (~26–27% in 2022–2024). However, momentum softened in 2025 with revenue down ~10% year over year and profitability compressing meaningfully (net margin ~2.3% vs. ~5.0% in 2024), indicating higher cost pressure and/or weaker hotel fundamentals versus the prior year.62
Positive
Balance Sheet
The balance sheet looks moderately leveraged for a lodging REIT, with debt-to-equity around ~1.0 in 2022–2024 and equity remaining sizable and stable. Return on equity is positive but low (roughly ~1%–3% in 2022–2024), suggesting modest profitability relative to the capital base. The 2025 debt figure appears to be missing or inconsistent (shown as zero), so leverage and balance sheet strength for 2025 can’t be reliably assessed from the provided data.58
Neutral
Cash Flow
Cash generation is a relative strength: operating cash flow and free cash flow are positive and sizable across 2022–2025, with 2025 improving despite weaker earnings. Cash flow has also been more resilient than net income (operating cash flow to net income above 1x in 2022–2025, and particularly high in 2025), which supports financial flexibility. The main drawback is volatility earlier in the cycle (negative free cash flow in 2020–2021 and a decline in free cash flow in 2024), reflecting sensitivity to lodging demand swings.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.35B | 1.37B | 1.33B | 1.19B | 785.66M |
| Gross Profit | -11.69M | 384.45M | 390.68M | 362.26M | 185.29M |
| EBITDA | 318.38M | 359.46M | 354.64M | 319.06M | -20.00M |
| Net Income | 28.51M | 68.02M | 76.41M | 41.92M | -305.17M |
Balance Sheet | |||||
| Total Assets | 4.74B | 4.88B | 4.92B | 4.98B | 5.15B |
| Cash, Cash Equivalents and Short-Term Investments | 410.16M | 409.81M | 516.67M | 481.32M | 665.34M |
| Total Debt | 2.32B | 2.34B | 2.34B | 2.33B | 2.53B |
| Total Liabilities | 2.56B | 2.59B | 2.57B | 2.55B | 2.74B |
| Stockholders Equity | 2.17B | 2.28B | 2.34B | 2.41B | 2.40B |
Cash Flow | |||||
| Free Cash Flow | 117.39M | 285.42M | 315.14M | 256.52M | -5.30M |
| Operating Cash Flow | 243.80M | 285.42M | 315.14M | 256.52M | 42.96M |
| Investing Cash Flow | -57.36M | -275.73M | -134.75M | -135.51M | -24.63M |
| Financing Cash Flow | -177.70M | -131.69M | -161.45M | -298.49M | -239.25M |
RLJ Lodging Technical Analysis
Negative
7.55
Price Trends
7.82
Negative
7.59
Negative
7.42
Positive
Market Momentum
-0.08
Positive
41.29
Neutral
14.48
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLJ, the sentiment is Negative. The current price of 7.55 is below the 20-day moving average (MA) of 7.98, below the 50-day MA of 7.82, and above the 200-day MA of 7.42, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 41.29 is Neutral, neither overbought nor oversold. The STOCH value of 14.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RLJ.
RLJ Lodging Risk Analysis
RLJ Lodging disclosed 2 risk factors in its most recent earnings report. RLJ Lodging reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RLJ Lodging Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.93B | 18.22 | 6.59% | 5.13% | 0.95% | -8.40% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $1.15B | 39.11 | 1.29% | 7.76% | -0.58% | -83.32% | |
62 Neutral | $1.36B | -20.13 | -2.57% | 0.34% | 0.99% | -360.58% | |
62 Neutral | $1.33B | 21.68 | 4.58% | 3.71% | 4.29% | 141.01% | |
54 Neutral | $512.81M | -65.40 | -0.56% | 6.61% | -1.20% | -328.23% | |
53 Neutral | $352.93M | -1.51 | -29.70% | 2.31% | -0.56% | -14.18% |
* Real Estate Sector Average
RLJ
RLJ Lodging
7.55
-0.89
-10.55%
DRH
Diamondrock
9.43
1.63
20.94%
INN
Summit Hotel Properties
4.21
-1.21
-22.28%
SVC
Service Properties
2.10
-0.36
-14.77%
PEB
Pebblebrook Hotel
11.94
1.07
9.86%
XHR
Xenia Hotels & Resorts
14.41
1.83
14.56%
RLJ Lodging Corporate Events
Business Operations and StrategyPrivate Placements and Financing
RLJ Lodging Trust Extends Debt Maturities, Bolsters Liquidity
Positive
Feb 18, 2026
On February 18, 2026, RLJ Lodging Trust announced it had successfully refinanced all of its debt maturities through 2028, extending its $600 million revolving credit facility to 2031 and upsizing and recasting an existing unsecured term loan to about $570 million, with part funded at closing and the balance as a delayed-draw commitment. The company also entered into a new $150 million seven-year delayed-draw term loan maturing in 2033 and refinanced approximately $155 million of mortgage debt that had been due in 2026, pushing those maturities out to 2029–2031 and enabling RLJ to fully address its $500 million senior notes maturing in July 2026, effectively laddering its debt profile and leaving no major maturities until 2029, which supports balance-sheet strength and provides greater financial flexibility for growth initiatives.
The refinancing package included a $150 million unsecured delayed-draw term loan under a 2026 Term Loan Agreement with The Huntington National Bank, scheduled to mature in 2033 and expected to be used to repay a portion of the 2026 senior notes before their July 2026 due date. RLJ also executed a 2022 Term Loan Amendment with Capital One to align covenant terms and pricing, including removing a 10-basis-point SOFR credit spread adjustment on a $300 million unsecured term loan maturing in 2028, and in January 2026 refinanced two PNC Bank mortgage loans totaling $154.8 million, extending their initial maturity to April 10, 2029 with extension options, collectively reinforcing the company’s liquidity and demonstrating strong lender support in a higher-rate environment.
The most recent analyst rating on (RLJ) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on RLJ Lodging stock, see the RLJ Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.