Pebblebrook Hotel Trust offers an asymmetric lifestyle-hotel recovery, with a 26.2% NAV discount, improving margins and a $26.65 probability-weighted five-year target.
Overview
Pebblebrook Hotel Trust (PEB) is an internally managed lodging REIT owning 43 premium lifestyle hotels and resorts with approximately 10,900 rooms across 13 U.S. markets. Its differentiated coastal-resort and gateway-urban portfolio earns Total RevPAR of $340, 6.6% above peers, while 81% of hotels remain unencumbered by traditional brands or management agreements, preserving repositioning flexibility. **The portfolio transformation is materially improving earnings quality:** resorts generated 48% of Hotel EBITDA in 2025 versus 17% in 2019, and East Coast markets generated 57% versus 38%. Q2 2026 revenue was $407.14 million, net income rose 178.6% year over year to $20.66 million, EPS was $0.17 versus a $0.10 consensus, and same-property Hotel EBITDA increased 7.1% to $123.3 million. Management raised 2026 Adjusted FFO guidance to $1.69-$1.76 per share and Adjusted EBITDAre guidance to $345.0-$353.0 million. At $18.08, PEB trades at 7.81x price-to-cash flow and a 26.2% discount to estimated $24.50 NAV. **The principal catalyst is urban occupancy recovery**, while completed redevelopment and low supply growth create operating leverage. The probability-weighted five-year target is $26.65.