Pebblebrook Hotel (PEB) Receives a Buy from Barclays

By Ryan Adsit

Barclays analyst Anthony Powell maintained a Buy rating on Pebblebrook Hotel (PEBResearch Report) on February 15 and set a price target of $38. The company’s shares opened today at $33.

Powell noted:

“We expect PEB shares to benefit as the company delevers the balance sheet and improves the growth profile of the portfolio through asset sales activity this year. PEB announced the sale of the 343-room Liaison Capital Hill hotel in Washington D.C. for $111mn, or 16.9x 2018 EBITDA and a 4.9% 2018 cap rate. The sale price equates to 324,000 per key. PEB acquired the hotel in the LaSalle transaction last year. In 2001, LaSalle purchased the property (then called Holiday for $44mn. We believe the sale is a positive indicator for the value of Washington D.C. hotel real estate. The Washington D.C. market has faced softer growth due to an ongoing decline of lobbying activity and high supply growth. In addition, the market faces a weaker convention calendar in 2019. These challenges have been partially offset by higher leisure demand.”

According to TipRanks.com, Powell is a 4-star analyst with an average return of 8.5% and a 62.5% success rate. Powell covers the Financial sector, focusing on stocks such as Park Hotels & Resorts Inc, Hersha Hospitality Trust, and Apple Hospitality REIT.

Currently, the analyst consensus on Pebblebrook Hotel is a Moderate Buy with an average price target of $35.88, representing an 8.7% upside. In a report issued on February 4, RBC Capital also maintained a Buy rating on the stock with a $37 price target.

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Based on Pebblebrook Hotel’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $29.71 million. In comparison, last year the company had a net profit of $11.8 million.

Based on the recent corporate insider activity of 23 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PEB in relation to earlier this year.

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Pebblebrook Hotel Trust is a real estate investment trust, which engages in the investments and acquisition in hotel properties. it includes cities in United States, such as Atlanta, Boston, Los Angeles, Miami, Minneapolis, Nashville, Naples, Philadelphia, Portland, Santa Monica, San Diego, San Francisco, Seattle, and Washington.