There is no way RLJ Lodging Trust (RLJ) can keep these numbers up

RLJ Lodging Trust (NYSE: RLJ) stock fell -5.69% on Friday to $11.43 against a previous-day closing price of $12.12. With 1.41 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.42 million shares. During the session, the REIT – Hotel & Motel company that operates in wider Real Estate sector, reached to the highest price of $12.29 whereas the lowest price it dropped to was $11.43. The 52-week range on RLJ shows that it touched its highest point at $16.22 and its lowest point at $10.19 during that stretch. It currently has a 1-year price target of $16.85. With its current market cap of 1.87 billion, RLJ has annualized dividend of $0.20 while the current yield stands at 1.75%. Beta for the stock currently stands at 1.74.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RLJ was down-trending over the past week, with a drop of -7.52%, but this was down by -10.49% over a month. Three-month performance surged to 7.22% while six-month performance fell -18.59%. The stock lost -20.68% in the past year, while it has lost -17.95% so far this year. A look at the trailing 12-month EPS for RLJ yields -1.12 with Next year EPS estimates of 0.54. For the next quarter, that number is 0.11. This implies an EPS growth rate of 22.90% for this year and 174.36% for next year.

Float and Shares Shorts:

At present, 163.54 million RLJ shares are outstanding with a float of 159.27 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.14 million, which was 6.67% higher than short shares on Jun 14, 2022. In addition to Mr. Robert Louis Johnson as the firm’s Co-Founder & Exec. Chairman, Ms. Leslie D. Hale serves as its Pres, CEO & Trustee.

Institutional Ownership:

Through their ownership of 96.02% of RLJ’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.94% of RLJ, in contrast to 52.40% held by mutual funds. Shares owned by individuals account for 43.84%. As the largest shareholder in RLJ with 14.74% of the stake, The Vanguard Group, Inc. holds 23,983,902 shares worth 23,983,902. A second-largest stockholder of RLJ, BlackRock Fund Advisors, holds 11,983,801 shares, controlling over 7.36% of the firm’s shares. FIAM LLC is the third largest shareholder in RLJ, holding 10,332,997 shares or 6.35% stake. With a 4.70% stake in RLJ, the Vanguard Real Estate Index Fund is the largest stakeholder. A total of 7,640,761 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.03% of RLJ stock, is the second-largest Mutual Fund holder. It holds 4,932,684 shares valued at 59.49 million. Fidelity Japan Fidelity US REIT M holds 2.84% of the stake in RLJ, owning 4,617,802 shares worth 55.69 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, RLJ reported revenue of $330.50M and operating income of $56.76M. It generated $32.97M net income for the quarter, which came to -$158.02M over the last twelve months. The EBITDA in the recently reported quarter was $104.35M and diluted EPS was $0.16. EBITDA for the full year was $256.15M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RLJ since 11 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RLJ analysts setting a high price target of $21.00 and a low target of $13.50, the average target price over the next 12 months is $16.85. Based on these targets, RLJ could surge 83.73% to reach the target high and rise by 18.11% to reach the target low. Reaching the average price target will result in a growth of 47.42% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. RLJ will report FY 2022 earnings on 02/22/2023. Analysts have provided yearly estimates in a range of $0.25 being high and $0.16 being low. For RLJ, this leads to a yearly average estimate of $0.20. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. RLJ Lodging Trust surprised analysts by $0.06 when it reported $0.16 EPS against a consensus estimate of $0.10. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.14 and the low estimate is $0.08. The average estimate for the next quarter is thus $0.11.

Summary of Insider Activity:

Insiders traded RLJ stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 11 while that of sell transactions has risen to 33 over the past year. The total number of shares bought during that period was 146,849 while 449,756 shares were sold.

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