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RLJ Lodging Trust (RLJ)
NYSE:RLJ
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RLJ Lodging
(NYSE:RLJ)
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Rating:58Neutral
Price Target:
$7.50
â–¼(-9.53% Downside)
Action:ReiteratedDate:12/09/25
RLJ Lodging's overall score reflects a stable financial position with operational efficiency but is weighed down by valuation concerns and mixed technical signals. The earnings call and corporate events provide some positive outlook, but challenges in revenue growth and external headwinds remain significant.
Positive Factors
Non-Room Revenue Growth
The growth in non-room revenue indicates successful diversification and ROI initiatives, which can provide a more stable revenue stream and reduce reliance on room occupancy.
Successful Renovations
Completion of renovations can enhance property appeal and drive future revenue growth, positioning RLJ Lodging to capitalize on increased demand and higher room rates.
Improved Debt Position
A strong liquidity position and managed debt maturities enhance financial stability, providing flexibility to invest in growth opportunities and weather economic uncertainties.
Negative Factors
RevPAR Decline
Declining RevPAR indicates challenges in maintaining pricing power and occupancy, which can pressure revenue and profitability if not addressed.
Impact of Government Shutdown
External factors like government shutdowns can disrupt operations and revenue, highlighting the vulnerability to macroeconomic events and policy changes.
Delayed Ramp of Renovated Properties
Delays in realizing benefits from renovations can postpone expected revenue growth, impacting short-term financial performance and strategic goals.
RLJ Lodging (RLJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.22B
Dividend Yield7.76%
Average Volume (3M)1.50M
Price to Earnings (P/E)165.8
Beta (1Y)0.86
Revenue Growth-0.58%
EPS Growth-83.32%
CountryUS
Employees73
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-0.04
Shares Outstanding151,085,080
10 Day Avg. Volume1,511,949
30 Day Avg. Volume1,503,822
Financial Highlights & Ratios
PEG Ratio-1.47
Price to Book (P/B)0.68
Price to Sales (P/S)1.14
P/FCF Ratio5.47
Enterprise Value/Market Cap0.66
Enterprise Value/Revenue0.59
Enterprise Value/Gross Profit2.21
Enterprise Value/Ebitda2.44
Forecast
1Y Price Target
$7.50Price Target Upside-9.53% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering5
EPS Forecast (FY)<0.01
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)
| 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
RLJ Lodging demonstrates stable financial performance with operational efficiency and cash conversion strengths. However, challenges include a decline in revenue growth and free cash flow growth, which need addressing for future performance.Income Statement
RLJ Lodging's income statement shows a mixed performance. The TTM data indicates a slight decline in revenue growth at -1.15%, which is concerning. However, the company maintains a positive gross profit margin of 38.95% and a modest net profit margin of 1.55%. The EBIT and EBITDA margins are 8.11% and 19.19% respectively, showing operational efficiency. Despite the recent revenue dip, the company has shown resilience in maintaining profitability.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.07, indicating a balanced approach to leveraging. The return on equity is low at 0.93%, suggesting limited returns for shareholders. However, the equity ratio is healthy, showing that a significant portion of assets is financed by equity, which provides stability.70
Positive
Cash Flow
Cash flow analysis reveals challenges with a negative free cash flow growth rate of -24.57% in the TTM period. However, the operating cash flow to net income ratio is strong at 6.17, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is 1.0, showing that the company is able to convert its net income into free cash flow effectively.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.35B | 1.37B | 1.33B | 1.19B | 785.66M | 464.63M |
| Gross Profit | 362.04M | 384.45M | 390.68M | 362.26M | 185.29M | -30.23M |
| EBITDA | 328.46M | 359.46M | 354.64M | 319.06M | -20.00M | -73.78M |
| Net Income | 33.45M | 68.02M | 76.41M | 41.92M | -305.17M | -404.44M |
Balance Sheet | ||||||
| Total Assets | 4.79B | 4.88B | 4.92B | 4.98B | 5.15B | 5.62B |
| Cash, Cash Equivalents and Short-Term Investments | 374.83M | 409.81M | 516.67M | 481.32M | 665.34M | 899.81M |
| Total Debt | 2.34B | 2.34B | 2.34B | 2.33B | 2.53B | 2.71B |
| Total Liabilities | 2.59B | 2.59B | 2.57B | 2.55B | 2.74B | 2.93B |
| Stockholders Equity | 2.19B | 2.28B | 2.34B | 2.41B | 2.40B | 2.67B |
Cash Flow | ||||||
| Free Cash Flow | 222.51M | 285.42M | 315.14M | 256.52M | -5.30M | -242.04M |
| Operating Cash Flow | 251.95M | 285.42M | 315.14M | 256.52M | 42.96M | -168.71M |
| Investing Cash Flow | -117.55M | -275.73M | -134.75M | -135.51M | -24.63M | -66.69M |
| Financing Cash Flow | -154.68M | -131.69M | -161.45M | -298.49M | -239.25M | 243.03M |
RLJ Lodging Technical Analysis
Positive
8.29
Price Trends
7.79
Positive
7.48
Positive
7.37
Positive
Market Momentum
0.13
Positive
60.03
Neutral
31.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLJ, the sentiment is Positive. The current price of 8.29 is above the 20-day moving average (MA) of 8.00, above the 50-day MA of 7.79, and above the 200-day MA of 7.37, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 60.03 is Neutral, neither overbought nor oversold. The STOCH value of 31.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $2.05B | 38.39 | 3.98% | 5.13% | 0.95% | -8.40% | |
62 Neutral | $1.38B | -10.33 | -3.74% | 0.34% | 0.99% | -360.58% | |
62 Neutral | $1.49B | 24.37 | 4.58% | 3.71% | 4.29% | 141.01% | |
58 Neutral | $1.22B | 165.84 | 1.49% | 7.76% | -0.58% | -83.32% | |
54 Neutral | $509.18M | -22.69 | -0.56% | 6.61% | -1.20% | -328.23% | |
53 Neutral | $364.75M | -1.32 | -35.25% | 2.31% | -0.56% | -14.18% |
* Real Estate Sector Average
RLJ
RLJ Lodging
8.29
-0.43
-4.93%
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PEB
Pebblebrook Hotel
13.18
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XHR
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15.97
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22.80%
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.