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RLJ Lodging Trust (RLJ)
:RLJ
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RLJ Lodging
(NYSE:RLJ)58Neutral
Positive Factors
Earnings
RLJ's earnings topped expectations on better top-line performance and better cost controls.
Financial Performance
Margins and expenses were better than anticipated, with Hotel EBITDA surpassing estimates.
Negative Factors
Market Preference
Downgrade of RLJ to Peer Perform is primarily driven by a shift in preference to resorts and group-focused assets.
RLJ Lodging (RLJ) vs. S&P 500 (SPY)
Market Cap
$1.41B
Dividend Yield5.32%
Average Volume (3M)1.65M
Price to Earnings (P/E)33.8
Beta (1Y)1.04
Revenue Growth3.31%
EPS Growth-15.16%
CountryUS
Employees79
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.27
Shares Outstanding151,961,730
10 Day Avg. Volume2,354,176
30 Day Avg. Volume1,652,681
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.03
Price to Cash Flow (P/CF)5.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.75Price Target Upside3.72% Upside
Rating ConsensusHold
Number of Analyst Covering2
RLJ Lodging Business Overview & Revenue Model
Company DescriptionRLJ Lodging Trust is a publicly traded real estate investment trust (REIT) that primarily focuses on acquiring premium-branded, focused-service, and compact full-service hotels. The company operates in the hospitality sector and owns a diversified portfolio of hotels across the United States, primarily in urban areas and dense suburban markets. RLJ Lodging Trust's properties are often associated with well-known hotel brands, providing high-quality accommodations and services to business and leisure travelers.
How the Company Makes MoneyRLJ Lodging Trust generates revenue primarily through the ownership and operation of its hotel properties. The company's primary revenue stream comes from room rentals, which includes income from nightly stays by guests at its hotels. Additional revenue is earned from food and beverage sales, meeting room rentals, and other ancillary services provided at its hotel locations. RLJ's strategic partnerships with major hotel brands enhance its revenue potential by attracting a steady flow of customers who are loyal to those brands. The company also benefits from economies of scale and operational efficiencies gained through its extensive portfolio of properties.
RLJ Lodging Financial Statement Overview
Summary
RLJ Lodging displays a recovering financial position with strong revenue growth and improving operational margins. The absence of debt in 2024 strengthens the balance sheet, ensuring financial stability. Cash flow generation is adequate, though there is room for improvement in profitability and free cash flow growth to enhance financial resilience and shareholder returns.Income Statement
RLJ Lodging's revenue has shown a positive growth trajectory over recent years, with a notable recovery from pandemic lows. The gross profit margin is strong at 100%, reflecting efficient cost management. However, the net profit margin is relatively low at 3.13% in 2024, indicating limited profitability, which could be a concern if not improved. EBIT and EBITDA margins have improved significantly, showcasing better operational performance.65
Positive
Balance Sheet
The balance sheet is strong, with no total debt reported in 2024, indicating a solid financial position. The debt-to-equity ratio is notably low, enhancing financial stability. Return on equity is modest at 1.88%, reflecting moderate returns to shareholders. The equity ratio is healthy, suggesting a robust capital structure.72
Positive
Cash Flow
RLJ Lodging's cash flow metrics show a mixed picture. Operating cash flow is solid, but there has been a decline in free cash flow growth, down 9.43% from the previous year. The operating cash flow to net income ratio is robust, indicating good cash generation from operations, though the free cash flow to net income ratio could be strengthened for better financial flexibility.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.37B | 1.33B | 1.19B | 785.66M | 473.09M | Gross Profit |
| 1.37B | 390.46M | 362.26M | 185.29M | -21.94M | EBIT |
| 0.00 | 331.88M | 135.56M | -57.11M | -257.09M | EBITDA |
| 359.46M | 354.64M | 320.44M | 130.67M | -66.53M | Net Income Common Stockholders |
| 42.91M | 76.41M | 41.92M | -311.09M | -408.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 409.81M | 516.67M | 481.32M | 665.34M | 899.81M | Total Assets |
| 4.88B | 4.92B | 4.98B | 5.15B | 5.62B | Total Debt |
| 2.34B | 2.34B | 2.33B | 2.53B | 2.71B | Net Debt |
| -409.81M | 1.83B | 1.85B | 1.87B | 1.81B | Total Liabilities |
| 2.59B | 2.57B | 2.55B | 2.74B | 2.93B | Stockholders Equity |
| 2.28B | 2.34B | 2.41B | 2.40B | 2.67B |
| Cash Flow | Free Cash Flow | |||
| 285.42M | 315.14M | 132.24M | -5.30M | -242.04M | Operating Cash Flow |
| 285.42M | 315.14M | 256.52M | 42.96M | -168.71M | Investing Cash Flow |
| -275.73M | -134.75M | -135.51M | -24.63M | -66.69M | Financing Cash Flow |
| -131.69M | -161.45M | -298.49M | -239.25M | 243.03M |
RLJ Lodging Technical Analysis
Negative
9.40
Price Trends
9.78
Negative
9.64
Negative
9.43
Negative
Market Momentum
-0.13
Positive
44.47
Neutral
41.67
Neutral
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 9.4 is below the 20-day moving average (MA) of 9.52, below the 50-day MA of 9.78, and below the 200-day MA of 9.43, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 44.47 is Neutral, neither overbought nor oversold. The STOCH value of 41.67 is Neutral, 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 43 risk factors in its most recent earnings report. RLJ Lodging reported the most risks in the “Finance & Corporate” 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.28B | 16.29 | 10.55% | 4.96% | 7.02% | -4.78% | |
71 Outperform | $3.48B | 16.34 | 6.55% | 6.59% | 6.52% | 14.45% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
61 Neutral | $1.42B | ― | -0.16% | 0.33% | 2.35% | 57.81% | |
60 Neutral | $1.70B | 44.81 | 2.40% | 1.46% | 5.12% | -49.88% | |
58 Neutral | $1.41B | 33.83 | 1.88% | 5.32% | 3.31% | -15.16% | |
54 Neutral | $1.34B | 85.53 | 1.30% | 3.58% | 1.33% | -10.65% |
* Real Estate Sector Average
Performance Comparison
RLJ
RLJ Lodging
9.33
-2.13
-18.59%
DRH
Diamondrock
8.11
-1.03
-11.27%
HST
Host Hotels & Resorts
15.85
-3.94
-19.91%
PEB
Pebblebrook Hotel
11.84
-4.15
-25.95%
XHR
Xenia Hotels & Resorts
13.18
-1.68
-11.31%
APLE
Apple Hospitality REIT
14.50
-0.89
-5.78%
RLJ Lodging Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 2.40% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for RLJ Lodging Trust, with strong RevPAR growth, successful conversions, increased shareholder returns, and a robust balance sheet being highlighted. However, there are challenges such as a slight occupancy decline and a difficult transaction market.Highlights
Strong RevPAR Growth
Achieved top quartile RevPAR growth that outpaced the industry with a 2.2% increase over the prior year, driven by urban markets which achieved 3.7% RevPAR growth in Q4.
Successful Asset Conversions
Completed three conversions in Houston, New Orleans, and Pittsburgh, achieving robust RevPAR growth of over 10% in 2024. The Courtyard Pittsburgh University Center conversion saw a 14% RevPAR increase year-over-year.
Increased Shareholder Returns
Enhanced shareholder returns by increasing the quarterly dividend by 50% and repurchasing approximately 2.3 million shares for $22 million at an average price of $9.39 per share.
Solid Financial Performance
Q4 EBITDA increased over the prior year for the second consecutive quarter. Hotel EBITDA of $90.4 million, with margins of 27.4%.
Strong Balance Sheet and Liquidity
Ended Q4 with over $0.9 billion of liquidity and $2.2 billion of debt. Successfully addressed 2025 debt maturities with a new $500 million term loan.
Lowlights
Occupancy Decline
Q4 saw a slight decline in occupancy by 0.2%, with overall occupancy at 69.2%.
Challenging Transaction Market
The transaction market remains choppy with a wide bid-ask spread, making asset sales challenging.
Group Segment Challenges
Group segment faced challenges due to the timing of the Jewish holidays in October and muted demand around the election in November.
Company Guidance
During the RLJ Lodging Trust fourth quarter 2024 earnings call, several key metrics and guidance for 2025 were highlighted. The company achieved a RevPAR growth of 2.2% for the fourth quarter, driven by a 2.5% increase in ADR, although occupancy slightly declined by 0.2%, with a 69.2% occupancy rate and an ADR of $198.71. Urban markets showed robust performance, with cities like New Orleans and Chicago CBD experiencing 27% and 19% RevPAR growth, respectively. The focus on capital allocation included completing six hotel conversions, resulting in 10% RevPAR growth for 2024, and repurchasing $22 million in stock. RLJ addressed all 2025 debt maturities, maintaining a strong balance sheet with $0.9 billion in liquidity and a $2.2 billion debt load. For 2025, RLJ anticipates RevPAR growth between 1% and 3%, adjusted EBITDA between $345 million and $375 million, and adjusted FFO per diluted share ranging from $1.46 to $1.66, with expectations for continued outperformance in urban markets driven by improving business travel and group demand.RLJ Lodging Corporate Events
Executive/Board Changes
RLJ Lodging Signs New Employment Agreement with Chairman
Neutral
Feb 19, 2025
On February 18, 2025, RLJ Lodging Trust announced that it had entered into an amended and restated employment agreement with Robert L. Johnson, the Executive Chairman of the Company’s Board of Trustees, effective November 1, 2024. The agreement, which maintains similar terms to previous arrangements, will keep Mr. Johnson in his role for a three-year term with specified compensation packages and potential bonuses, as well as options for equity grants. The agreement also outlines severance, non-competition, and non-solicitation terms, impacting the company’s executive stability and leadership continuity.
Executive/Board Changes
RLJ Lodging Extends COO Thomas Bardenett’s Employment
Neutral
Dec 23, 2024
RLJ Lodging Trust has entered into a second amended and restated employment agreement with Thomas Bardenett, its Executive Vice President and COO, effective as of December 20, 2024. The agreement, which extends his role until February 2029, maintains his salary at $565,000 with potential increases, and includes annual bonus opportunities and equity incentives, alongside severance and non-compete clauses.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.