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RLJ Lodging Trust (RLJ)
NYSE:RLJ
US Market

RLJ Lodging (RLJ) AI Stock Analysis

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RLJ Lodging

(NYSE:RLJ)

61Neutral
RLJ Lodging Trust shows a mixed outlook. Financial performance is recovering with strong revenue growth and operational improvements. Technical analysis indicates a bearish trend with potential for short-term challenges. Valuation is high, but the dividend yield is attractive for income investors. The earnings call suggests optimism with strong RevPAR growth and strategic asset conversions, although some market challenges remain.
Positive Factors
Capital Strategy
Proceeds from the asset sale were used to repurchase stock, reflecting a strategic use of capital.
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.
Outlook
RLJ significantly reduced its 2H24 outlook, which is unchanged today, reflecting 3Q24 outperformance.
Supply Growth
Concerns over supply growth in the select-service segment relative to full-service.

RLJ Lodging (RLJ) vs. S&P 500 (SPY)

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 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 has shown strong revenue growth and improved operational margins. The absence of debt in 2024 strengthens its balance sheet, ensuring financial stability. However, the net profit margin is low, and there is a decline in free cash flow growth, indicating room for improvement in profitability and cash flow generation.
Income Statement
65
Positive
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.
Balance Sheet
72
Positive
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.
Cash Flow
60
Neutral
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.37B1.33B1.19B785.66M473.09M
Gross Profit
1.37B390.46M362.26M185.29M-21.94M
EBIT
150.22M331.88M135.56M-57.11M-257.09M
EBITDA
359.46M354.64M320.44M130.67M-66.53M
Net Income Common Stockholders
42.91M76.41M41.92M-311.09M-408.80M
Balance SheetCash, Cash Equivalents and Short-Term Investments
409.81M516.67M481.32M665.34M899.81M
Total Assets
4.88B4.92B4.98B5.15B5.62B
Total Debt
2.34B2.34B2.33B2.53B2.71B
Net Debt
-409.81M1.83B1.85B1.87B1.81B
Total Liabilities
2.59B2.57B2.55B2.74B2.93B
Stockholders Equity
2.28B2.34B2.41B2.40B2.67B
Cash FlowFree Cash Flow
285.42M315.14M132.24M-5.30M-242.04M
Operating Cash Flow
285.42M315.14M256.52M42.96M-168.71M
Investing Cash Flow
-275.73M-134.75M-135.51M-24.63M-66.69M
Financing Cash Flow
-131.69M-161.45M-298.49M-239.25M243.03M

RLJ Lodging Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price7.02
Price Trends
50DMA
8.09
Negative
100DMA
8.94
Negative
200DMA
8.96
Negative
Market Momentum
MACD
-0.31
Negative
RSI
42.11
Neutral
STOCH
55.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLJ, the sentiment is Neutral. The current price of 7.02 is above the 20-day moving average (MA) of 7.00, below the 50-day MA of 8.09, and below the 200-day MA of 8.96, indicating a neutral trend. The MACD of -0.31 indicates Negative momentum. The RSI at 42.11 is Neutral, neither overbought nor oversold. The STOCH value of 55.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
PKPK
69
Neutral
$2.03B9.965.68%10.00%-3.67%122.68%
SHSHO
64
Neutral
$1.67B60.582.01%4.37%-8.18%-85.42%
DRDRH
63
Neutral
$1.54B40.502.98%2.36%5.12%-49.88%
RLRLJ
61
Neutral
$1.08B25.902.94%7.83%3.31%-15.16%
XHXHR
60
Neutral
$1.09B69.631.24%4.74%1.33%-10.65%
59
Neutral
$2.74B11.730.14%8782.99%5.34%-16.62%
PEPEB
58
Neutral
$1.08B-0.16%0.44%2.35%57.81%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RLJ
RLJ Lodging
7.02
-3.30
-31.98%
DRH
Diamondrock
7.19
-1.29
-15.21%
SHO
Sunstone Hotel
8.21
-1.67
-16.90%
PEB
Pebblebrook Hotel
9.00
-5.29
-37.02%
XHR
Xenia Hotels & Resorts
10.62
-2.82
-20.98%
PK
Park Hotels & Resorts
9.90
-4.52
-31.35%

RLJ Lodging Earnings Call Summary

Earnings Call Date:Feb 25, 2025
(Q4-2024)
|
% Change Since: -22.09%|
Next Earnings Date:May 05, 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.
Q4-2024 Updates
Positive Updates
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.
Negative Updates
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 Executive VP Chad Perry Resigns
Neutral
Apr 15, 2025

On April 9, 2025, Chad Perry, Executive Vice President, General Counsel and Corporate Secretary of RLJ Lodging Trust, announced his decision to resign from his roles effective May 9, 2025, to explore principal investing opportunities. His departure is amicable and not due to any disagreements with the company’s operations, policies, or practices.

Spark’s Take on RLJ Stock

According to Spark, TipRanks’ AI Analyst, RLJ is a Neutral.

RLJ Lodging Trust shows a mixed performance with strong revenue growth and a solid balance sheet, but faces challenges with low profitability and declining free cash flow. The bearish technical indicators and overvaluation are offset by a high dividend yield and positive earnings call outlook. Key risks include occupancy declines and market transaction difficulties.

To see Spark’s full report on RLJ stock, click here.

Executive/Board ChangesBusiness Operations and Strategy
RLJ Lodging CFO Sean Mahoney Announces Retirement
Neutral
Mar 20, 2025

Sean Mahoney, the Executive Vice President and Chief Financial Officer of RLJ Lodging Trust, announced his retirement effective May 2025, after seven years with the company and over 30 years in the hospitality REIT industry. His departure is not due to any disagreement with the company, and he will assist in the transition process until his retirement. RLJ Lodging Trust has initiated a succession process to find his replacement, ensuring continued stability and strategic positioning in the industry.

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.

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.