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1. Company Snapshot

1.a. Company Description

RLJ 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.

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1.b. Last Insights on RLJ

RLJ Lodging Trust's recent performance was positively driven by its Q3 earnings release, which beat FFO and revenue estimates. The company's quarterly FFO of $0.27 per share surpassed the Zacks Consensus Estimate of $0.26 per share. Additionally, Raymond James upgraded the stock to a buy rating, citing a nationally-diversified hotel portfolio, post-pandemic dividend growth return, and an attractive +8% yield. The company also boasts a modest balance sheet risk profile. Furthermore, RLJ Lodging Trust repurchased 0.2 million shares, reducing the number of outstanding shares and increasing value for shareholders.

1.c. Company Highlights

2. RLJ Lodging Trust's Q3 Earnings: A Mixed Bag

RLJ Lodging Trust reported a RevPAR decline of 5.1% in Q3, in line with expectations, with hotel EBITDA reaching $80.8 million and adjusted FFO per diluted share coming in at $0.27, beating estimates of $0.26. The company's non-room revenues grew 1.3%, driven by ROI initiatives. The RevPAR index gain highlights the quality of its assets. The company's balance sheet remains well-positioned with approximately $1 billion of liquidity.

Publication Date: Nov -30

📋 Highlights
  • RevPAR Decline: Third-quarter RevPAR fell 5.1%, with urban markets outperforming the portfolio.
  • Non-Room Revenue Growth: Increased 1.3% driven by F&B, parking, and market expansions, despite lower occupancy.
  • Hotel EBITDA & Adjusted FFO: EBITDA reached $80.8 million, and adjusted FFO per diluted share was $0.27.
  • Updated Guidance Impact: Full-year RevPAR growth now projected at -1.9% to -2.6% due to government shutdown and market trends.
  • Balance Sheet Strength: Maintains $1 billion liquidity and a 3-year weighted-average debt maturity.

Financial Performance

The company's financial performance was marked by a decline in RevPAR, but it was able to achieve growth in non-room revenues. The adjusted FFO per diluted share beat estimates, indicating a positive surprise. The company's hotel EBITDA margin was also stable, indicating a good level of operational efficiency.

Operational Highlights

The company made progress on several fronts, including advancing its transformative renovations and conversions. Leslie D. Hale noted that September's group pace was at 97%, up 700 basis points from the beginning of the month, driven 100% by demand. The company's out-of-room revenue was a bright spot, surprising to the upside in Q3, driven by investments in F&B, parking, and market expansions.

Guidance and Outlook

The company is adjusting its full-year outlook due to current trends and the government shutdown, expecting comparable RevPAR growth to range between -1.9% and -2.6%. The company's guidance implies a year-to-date RevPAR of negative 1.9%. Analysts estimate next year's revenue growth at 2.3%.

Valuation

With a P/E Ratio of 33.61 and an EV/EBITDA of 10.31, the company's valuation appears to be reasonable. The Dividend Yield is attractive at 7.96%. The company's ROIC is 10.15%, indicating a good level of profitability. The Net Debt / EBITDA ratio is 6.53, indicating a moderate level of leverage.

Market Trends

The company is optimistic about San Francisco's recovery, driven by unique demand drivers such as the convention center, AI-related growth, and office demand. The company's urban footprint is well-positioned relative to the sector, with a strong presence in markets like New York City, where demand is strong and average rate growth is positive.

Share Repurchases and Capital Allocation

The company views share repurchases as attractive and will continue to be programmatic in deploying disposition proceeds into buying back shares. The company aims to maintain a healthy balance sheet and strive for a leverage-neutral basis.

3. NewsRoom

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RLJ Lodging Trust: While It Upgrades Its Hotels, Raymond James Just Upgraded The Stock Too

Nov -17

Source: seekingalpha.com

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RLJ Lodging Trust (NYSE:RLJ) Receives Consensus Rating of “Hold” from Brokerages

Nov -15

Source: defenseworld.net

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RLJ Lodging Trust (RLJ) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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RLJ Lodging (RLJ) Reports Q3 Earnings: What Key Metrics Have to Say

Nov -06

Source: zacks.com

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RLJ Lodging (RLJ) Beats Q3 FFO and Revenue Estimates

Nov -06

Source: zacks.com

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RLJ Lodging Trust Reports Third Quarter 2025 Results

Nov -05

Source: businesswire.com

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RLJ Lodging Trust (RLJ) Projected to Post Earnings on Wednesday

Nov -04

Source: defenseworld.net

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October's 5 Dividend Growth Stocks With Yields Up To 8.33%

Oct -20

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.40%)

6. Segments

Room

Expected Growth: 3.5%

RLJ Lodging Trust's 3.5% growth in Room segment is driven by increasing demand for mid-scale and upscale hotels, particularly in urban markets. Additionally, strategic acquisitions and renovations of existing properties, as well as a focus on operational efficiency, contribute to the growth. Furthermore, the company's diversified portfolio across various markets and brands helps to mitigate risks and drive consistent performance.

Food and Beverage

Expected Growth: 2.8%

RLJ Lodging Trust's Food and Beverage segment growth of 2.8% is driven by increasing demand for experiential travel, rising average daily rates, and strategic hotel renovations. Additionally, the company's focus on premium amenities, such as upscale dining options and craft bars, is attracting higher-revenue guests and boosting RevPAR.

Other

Expected Growth: 3.2%

RLJ Lodging Trust's 3.2% growth is driven by increasing RevPAR, strategic acquisitions, and cost savings initiatives. Additionally, the company's focus on premium-branded hotels and strong balance sheet position it for continued growth. Furthermore, the growing demand for lodging and limited supply in key markets also contribute to the company's growth momentum.

7. Detailed Products

Hotels

RLJ Lodging Trust owns and operates a diverse portfolio of hotels across the United States, offering a range of accommodations and amenities to guests.

Resorts

RLJ Lodging Trust's resort properties offer luxurious amenities and activities, such as golf courses, spas, and recreational facilities, catering to leisure travelers and families.

Extended Stay Hotels

RLJ Lodging Trust's extended stay hotels provide guests with kitchen-equipped rooms and amenities for longer-term stays, ideal for business travelers and relocation guests.

Select Service Hotels

RLJ Lodging Trust's select service hotels offer a balance of comfort and affordability, with amenities such as free breakfast and fitness centers, catering to budget-conscious travelers.

Full Service Hotels

RLJ Lodging Trust's full service hotels provide guests with upscale amenities, including restaurants, bars, and meeting spaces, catering to business travelers and special occasion guests.

8. RLJ Lodging Trust's Porter Forces

Forces Ranking

Threat Of Substitutes

RLJ Lodging Trust operates in the real estate investment trust (REIT) industry, which has a moderate threat of substitutes. While there are alternative investment options available, such as stocks and bonds, REITs offer a unique combination of income and diversification benefits that are difficult to replicate.

Bargaining Power Of Customers

RLJ Lodging Trust's customers are primarily institutional investors, who have limited bargaining power due to the company's diversified portfolio and strong brand reputation.

Bargaining Power Of Suppliers

RLJ Lodging Trust's suppliers, including hotel operators and property managers, have some bargaining power due to the company's dependence on them for operational efficiency. However, the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The threat of new entrants in the REIT industry is low due to the significant capital requirements and regulatory barriers to entry. RLJ Lodging Trust's established brand and diversified portfolio provide a competitive advantage.

Intensity Of Rivalry

The REIT industry is highly competitive, with many established players competing for investors' attention. RLJ Lodging Trust faces intense rivalry from peers such as Host Hotels & Resorts and Marriott International.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.69%
Debt Cost 4.02%
Equity Weight 47.31%
Equity Cost 12.39%
WACC 7.98%
Leverage 111.36%

11. Quality Control: RLJ Lodging Trust passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
RLJ Lodging

A-Score: 6.1/10

Value: 8.3

Growth: 4.7

Quality: 6.1

Yield: 8.0

Momentum: 2.5

Volatility: 7.0

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A-Score: 5.7/10

Value: 5.3

Growth: 5.0

Quality: 4.9

Yield: 7.0

Momentum: 3.5

Volatility: 8.3

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Chatham Lodging

A-Score: 5.5/10

Value: 6.2

Growth: 5.3

Quality: 4.7

Yield: 6.0

Momentum: 2.5

Volatility: 8.0

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Xenia Hotels & Resorts

A-Score: 5.1/10

Value: 5.5

Growth: 4.7

Quality: 3.5

Yield: 6.0

Momentum: 4.0

Volatility: 7.0

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Braemar Hotels & Resorts

A-Score: 5.1/10

Value: 9.1

Growth: 3.0

Quality: 3.7

Yield: 9.0

Momentum: 3.0

Volatility: 2.7

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SVC

A-Score: 4.9/10

Value: 9.8

Growth: 3.2

Quality: 5.2

Yield: 6.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.32$

Current Price

7.32$

Potential

-0.00%

Expected Cash-Flows