Credit Suisse Downgrades Pebblebrook Hotel Trust (PEB) Due to Valuation Concerns
Credit Suisse analyst Ian Weissman weighed in on Pebblebrook Hotel Trust (NYSE:PEB) after reassessing the company’s valuation. As a result, the analyst downgrades the company from Outperform to Neutral and reduces his price target from $30 to $29.
Weissman comments, “Similar to LHO, the primary reason for the downgrade is valuation-based, with the stock trading at a 13.1x multiple and 1% discount to NAV. The stock has run 14% in the trailing 30 days, pushing the EV/EBITDA multiple to 13.1x, slightly above our 12.75x target.” However, the analyst does point to one potential catalyst as the “impending sale of its NYC portfolio,” which is valued at $475,000 per key. The analyst explains, “This would eliminate exposure to NYC, which has been a significant drag on fundamentals for the last couple of years. In addition to eliminating its NYC exposure, the sale would improve its balance sheet.”
According to TipRanks, Ian Weissman has a 75% success rate recommending stocks with an average annual return of 7.4% per rating.