RLJ Lodging Trust Price Target Cut to $7 by Truist

Truist has lowered its price target on RLJ Lodging Trust to $7 from $10 and maintains a Hold rating. The firm cites challenges for the company due to a lack of luxury exposure, international demand issues, and city-specific factors like Austin and D.C. However, RLJ's repositioning efforts and recovering business travel to urban markets are seen as positives.

Truist Securities has lowered its price target for RLJ Lodging Trust (RLJ) to $7 from $10, while maintaining a Hold rating. The adjustment comes as the firm recalibrates its financial forecasts in response to significant macroeconomic headwinds. Gregory Miller, the analyst at Truist, cited challenges including limited luxury exposure, international demand issues, and city-specific factors such as those in Austin and Washington D.C. However, the analyst also noted that RLJ's ongoing repositioning efforts and the resurgence in business travel to major urban centers could help stabilize the company's performance.

The current market capitalization of RLJ Lodging Trust stands at $1.11 billion, with the stock trading at $7.40. Despite the recent adjustment, the company maintains an attractive 8.08% dividend yield, having raised its dividend for three consecutive years. The new price target is based on a constant multiple of 10.5 times the 2026 EBITDA estimate.

The company's Adjusted EBITDA for 2025 has been revised to $330 million, down from the earlier projection of $347 million. Similarly, the forecast for Adjusted Funds From Operations (AFFO) per share for 2025 has been revised to $1.38 from $1.48. Looking ahead to 2026, the Adjusted EBITDA estimate has been scaled back to $326 million from the prior $360 million forecast, with AFFO per share expected to be $1.35, a decrease from the previous estimate of $1.49.

Investors are advised to consider these updates as they make informed decisions about their portfolios. The average one-year price target for RLJ Lodging Trust, as forecasted by 8 analysts, is $9.16, with a high estimate of $12.00 and a low estimate of $6.00. The consensus recommendation from 10 brokerage firms is currently 2.7, indicating a Hold status.

For deeper insights into RLJ Lodging Trust's valuation and future prospects, investors can access comprehensive analysis from InvestingPro subscribers. Additionally, the company reported its first-quarter 2025 earnings, showing mixed results. The company posted an earnings per share (EPS) of -$0.02, surpassing the forecasted EPS of -$0.0402. However, revenue fell slightly short of expectations, coming in at $328.12 million against a forecast of $329.08 million.

Despite these challenges, RLJ Lodging Trust maintains a diversified urban-centric portfolio with a modest RevPAR growth of 1.6%. The company maintains a cautious outlook for 2025, with expectations for comparable RevPAR growth between -1% to +1%.

References:
[1] https://www.investing.com/news/analyst-ratings/truist-cuts-rlj-lodging-trust-target-to-7-maintains-hold-93CH-4087058
[2] https://www.gurufocus.com/news/2916510/rlj-lodging-rlj-price-target-lowered-by-truist-securities-rlj-stock-news
[3] https://www.gurufocus.com/news/2915773/rlj-lodging-trust-target-price-cut-to-7-due-to-market-challenges-rlj-stock-news