Key Highlights

  • Pebblebrook reported second-quarter net income of $24.9 million, or $0.17 per diluted share, up from $19.3 million a year earlier.
  • Same-property RevPAR rose 6.5% to $259.41 in the second quarter, and non-GAAP same-property Hotel EBITDA rose 7.1% to $123.3 million.
  • Pebblebrook raised its 2026 outlook on July 29, setting non-GAAP Adjusted EBITDAre at $345.0 million to $353.0 million.
  • Pebblebrook closed the $10.0 million sale of The Hotel Zags in Portland on October 8, leaving 42 hotels.

Pebblebrook Hotel Trust (NYSE:PEB) shares were trading near their 52-week high at USD 20.01 on October 19, 2026, up 2.64%. The lodging REIT owns 42 urban and resort hotels after closing the sale of The Hotel Zags in Portland, Oregon, on October 8. Its latest results, for the second quarter, came out on July 29 alongside a raised 2026 outlook. Two large brokerages have updated their targets since then, and both rate the shares Underweight.

Two Underweight ratings since the July results

Barclays lowered its target to $14 from $15 on August 27, and Morgan Stanley raised its target to $14 from $13 on October 12. Both firms kept their Underweight ratings unchanged and adjusted only the target, and the pages reviewed did not state reasoning for either move. These are the firms' own views, not a forecast by this article.

Second quarter: higher profit, flat revenue, uneven markets

Total revenues for the second quarter of 2026 were $407.1 million, little changed from $407.5 million a year earlier. GAAP net income rose to $24.9 million from $19.3 million, and net income attributable to common shareholders was $20.7 million, or $0.17 per diluted share, against $0.06. Over six months, net income was $6.5 million, but a net loss of $9.0 million, or $0.08 per share, remained attributable to common shareholders.

Same-property RevPAR rose 6.5% to $259.41, average daily rate rose 4.7% to $326.60, and occupancy reached 79.4% from 78.1%. Same-property Hotel EBITDA, a non-GAAP measure, rose 7.1% to $123.3 million, which the company said was $6.6 million above the high end of its outlook. Adjusted FFO per diluted share, also non-GAAP, was $0.68 versus $0.65.

Markets diverged. Resort RevPAR rose 12.0% and San Francisco RevPAR rose 16.0%, while Washington, DC fell 9.9% and downtown San Diego fell 9.1%. Group revenue declined slightly, and urban banquet and catering revenue fell 20%.

Asset sales, buybacks and the balance sheet

Pebblebrook sold the 115-room Chamberlain West Hollywood Hotel on May 27 for $43.5 million, accepting preferred shares valued at $26.1 million as part of the payment. The 174-room Hotel Zags followed on October 8 for $10.0 million. The company expects to use proceeds for general corporate purposes, which may include opportunistic repurchases of common or preferred shares, and said the sale is not expected to change the third-quarter outlook.

In the first half, the company bought back 944,452 common shares for $12.9 million, leaving $137.1 million under a $150.0 million authorization. On July 24, the board authorized a further $50.0 million of preferred repurchases, to begin once the 2023 program is complete.

At June 30, cash and cash equivalents were $261.0 million, the $650.0 million revolver had no borrowings, and net debt stood at 5.3 times trailing twelve-month corporate EBITDA. The remaining $350.0 million of 1.75% convertible notes due in December 2026 is funded, and no other maturities fall before 2028. On September 15 the company declared a quarterly common dividend of $0.01 per share, payable October 15. Its June 30 quarterly report says it is not presently subject to any material litigation.

Outlook and the next report

On July 29, Pebblebrook raised its full-year 2026 outlook and kept its second-half assumptions unchanged. It now expects net income (loss) from a loss of $1.7 million to income of $6.3 million, non-GAAP Adjusted EBITDAre of $345.0 million to $353.0 million, non-GAAP Adjusted FFO of $1.69 to $1.76 per diluted share, and same-property Hotel EBITDA of $377.0 million to $385.0 million. The company said it will reflect the Zags sale in an updated outlook when it reports third-quarter results. For that quarter, it guided to net income of $9.0 million to $13.0 million and non-GAAP Adjusted FFO of $0.48 to $0.52 per diluted share. Management called its stance appropriately cautious given geopolitical, policy and economic uncertainty. These are the company's own estimates. Third-quarter results are due after the market close on October 29.