Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Pebblebrook Hotel (PEB) Analysis - Pebblebrook Hotel (PEB) has shown a four-week price change of 5.4%, indicating growing investor interest [4] - Over the past 12 weeks, PEB's stock has gained 11.6%, with a beta of 1.85, suggesting it moves 85% more than the market [5] - PEB has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - PEB has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [7] - The stock is trading at a Price-to-Sales ratio of 0.88, suggesting it is undervalued as investors pay only 88 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides PEB, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Various Zacks Premium Screens are available to assist in identifying potential winning stocks based on different investing styles [9]

Core Viewpoint - Pebblebrook Hotel (PEB) is showing potential as a strong investment opportunity due to its recent technical indicators and positive earnings revisions [1][4]. Technical Analysis - PEB has recently surpassed the 20-day moving average, indicating a short-term bullish trend [1][2]. - The stock has gained 10.8% over the past four weeks, suggesting positive momentum [4]. Earnings Estimates - There have been no downward revisions in earnings estimates for PEB in the past two months, while five estimates have been raised for the current fiscal year [4]. - The consensus earnings estimate for PEB has also increased, reinforcing the bullish outlook [4][5]. Investment Recommendation - Given the positive technical indicators and favorable earnings estimate revisions, PEB is recommended for investors looking for potential gains in the near future [5].

Core Viewpoint - Pebblebrook Hotel (PEB) shows potential as a stock pick due to surpassing key technical resistance levels, indicating a bullish trend [1][2]. Technical Analysis - PEB has recently surpassed the 50-day moving average, a significant indicator of support and resistance, suggesting a short-term bullish trend [1][2]. - Over the past four weeks, PEB's stock price has increased by 10.8%, reflecting positive momentum [2]. Earnings Estimates - There have been five upward revisions in earnings estimates for PEB for the current fiscal year, with no downward revisions, indicating strong investor confidence [3]. - The consensus earnings estimate for PEB has also increased, further supporting the bullish outlook [3]. Investment Consideration - Given the positive technical indicators and favorable earnings estimate revisions, PEB is recommended for inclusion on investors' watchlists [3].

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Financial Data and Key Metrics Changes - Same property hotel EBITDA totaled $105.4 million, in line with the midpoint of guidance, while adjusted EBITDA came in at $99.2 million, exceeding the midpoint by $2.2 million [3] - Adjusted FFO per share was $0.01, $0.03 above the midpoint, reflecting resilience in the operating model and disciplined cost management [3] - Same property occupancy increased nearly 190 basis points, while ADR declined 5.4%, resulting in a 3.1% decline in RevPAR and a 1.5% drop in same property total RevPAR [3][4] Business Line Data and Key Metrics Changes - Performance was led by properties in San Francisco and Chicago, with San Francisco's RevPAR rising 8.3% due to a 690 basis point jump in occupancy [4][5] - The resort portfolio remained resilient, with total RevPAR increasing by 0.7%, driven by Newport Harbor Island Resort's RevPAR jumping 29% [6] - Urban total RevPAR declined 2.7%, with strength in San Francisco and Chicago offset by weakness in Los Angeles and Washington, D.C. [7] Market Data and Key Metrics Changes - Washington, D.C. was the softest market, with RevPAR down 16.4% due to reduced government travel demand [7] - Los Angeles experienced a 10.4% decline in RevPAR, driven by adverse weather conditions [8] - Boston and San Diego also saw year-over-year declines attributed to lighter convention calendars and softer group attendance [8] Company Strategy and Development Direction - The company is focused on driving operating efficiencies and disciplined cost management, with a strategic redevelopment program enhancing market share and profitability [6][17] - The company plans to leverage favorable macroeconomic conditions and a robust events calendar in 2026 to drive growth [30] - The company is investing in AI-enabled tools to improve operational efficiency and reduce costs [17][42] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q4 due to macroeconomic uncertainty and the ongoing government shutdown impacting travel [18][20] - The company anticipates a favorable setup for 2026, with expectations of normalized hotel demand correlating with GDP growth [22][23] - Management highlighted the potential for significant demand growth driven by major events and a favorable holiday calendar in 2026 [27][28] Other Important Information - The company entered into an agreement to sell one of its hotels for $72 million, expected to close in Q4 [11] - The company successfully completed a $400 million offering of convertible notes, using proceeds to retire existing debt [12] - The company expects to generate over $100 million in free cash flow by the end of 2026 [12] Q&A Session Summary Question: Inquiry about San Francisco lodging performance - Management noted that San Francisco is experiencing strong demand, allowing for increased room rates during high-occupancy nights [31][34] Question: Impact of AI industry on demand - Management observed a growing number of companies booking transient and group business, particularly in the AI sector, positively impacting weekday demand [37][38] Question: Expense management and labor costs - Management confirmed that efficiency improvements and reduced headcount are contributing to lower costs, with expectations for moderated labor costs in 2026 [39][40] Question: Future performance of Los Angeles market - Management expects Los Angeles to perform better in 2026 due to easier comps and a recovery in entertainment production [42] Question: Transaction market outlook - Management indicated a pause in the transaction market due to macro uncertainty but anticipates pent-up demand for transactions once clarity returns [44][46] Question: Attrition trends in bookings - Management noted increased attrition primarily in government-related bookings, but overall attrition payments were lower year-over-year [56][57]

Portfolio Repositioning - Pebblebrook has strategically shifted its portfolio towards leisure-oriented and group-focused properties, reducing exposure to urban and corporate transient markets since 2019[15] - Resort EBITDA contribution increased from 17% to 47%, while Urban EBITDA contribution decreased from 83% to 53%[19] - The company acquired 5 upper upscale and luxury resorts for $802 million and sold 15 lower-quality urban properties for $12 billion[19] - East Coast properties now contribute 56% of EBITDA, up from 38%, while San Francisco's EBITDA contribution declined by 18%, and West Coast properties now contribute 40% of EBITDA, down from 56%[19] Financial Performance and Growth Opportunities - The company estimates a Hotel EBITDA upside of approximately $71 million, with $16 million from urban markets recovery, $45 million from ROI redevelopment projects, and $10 million from LaPlaya EBITDA growth opportunity[11, 23] - The company anticipates a potential $45+ million increase in its Urban Hotel EBITDA over the next three to four years, supported by a favorable long-term outlook[35] - Approximately $278 million of ROI capital invested is estimated to generate annual stabilized EBITDA gains of $29 to $33 million[11, 44] - LaPlaya Beach Resort & Club generated $19 million of hotel EBITDA in 2024 and is forecasting $25 million for 2025[51] Valuation and Financing - Pebblebrook's recent public market valuation reflects an approximate 55% discount to its recently calculated private market valuation of $2350 per share[11, 54, 57] - The company completed a $400 million private offering of 2030 1625% Convertible Notes, using proceeds to retire an equal amount of its 2026 175% Convertible Notes at a 2% discount to par[61, 62] - Approximately 43 million common shares were repurchased at $1156/share, increasing the effective all-in equity conversion price to $2443/share[62, 64]

Core Insights - Pebblebrook Hotel reported revenue of $398.72 million for the quarter ended September 2025, reflecting a 1.4% decrease year-over-year and a revenue surprise of -0.48% compared to the Zacks Consensus Estimate of $400.64 million [1] - The company's EPS for the quarter was $0.51, an increase from $0.24 in the same quarter last year, resulting in an EPS surprise of +2% against the consensus estimate of $0.50 [1] Financial Performance Metrics - Same-Property RevPAR growth rate was -1.5%, better than the average estimate of -2.3% from three analysts [4] - Total Guest Rooms stood at 11,937, slightly above the average estimate of 11,925 from two analysts [4] - Food and beverage revenues were reported at $96.24 million, slightly below the estimated $96.46 million, but showing a year-over-year increase of +0.3% [4] - Other operating revenues reached $47.87 million, exceeding the average estimate of $45.9 million, with a year-over-year increase of +4.6% [4] - Room revenues were reported at $254.61 million, lower than the estimated $258.29 million, representing a year-over-year decline of -3.1% [4] - Net Earnings Per Share (Diluted) was reported at -$0.37, compared to the estimated $0.00 from four analysts [4] Stock Performance - Pebblebrook Hotel's shares have returned -3.4% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Core Insights - Pebblebrook Hotel (PEB) reported quarterly funds from operations (FFO) of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.50 per share, but down from $0.59 per share a year ago, indicating a FFO surprise of +2.00% [1] - The company generated revenues of $398.72 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.48% and down from $404.53 million year-over-year [2] - Pebblebrook Hotel has surpassed consensus FFO estimates in all four of the last quarters, while it has topped consensus revenue estimates three times during the same period [2] Financial Performance - The FFO for the previous quarter was $0.65 per share, which was a surprise of +12.07% compared to the expected $0.58 per share [1] - The current consensus FFO estimate for the upcoming quarter is $0.23 on revenues of $352.34 million, and for the current fiscal year, it is $1.51 on revenues of $1.48 billion [7] Market Position - Pebblebrook Hotel shares have underperformed the market, losing about 24.1% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The Zacks Industry Rank places the REIT and Equity Trust - Other sector in the top 34% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the trends in estimate revisions [3][4] - The estimate revisions trend for Pebblebrook Hotel was favorable ahead of the earnings release, resulting in a Zacks Rank 1 (Strong Buy) for the stock, suggesting expected outperformance in the near future [6]

Group 1: Company Overview - Pebblebrook Hotel Trust (PEB) preferreds are trading at attractive pricing, offering an 8%+ yield and 45% upside to par, indicating a high return potential with relatively low risk [1][34] - PEB operates primarily in the higher end of the Revenue Per Available Room (RevPAR) spectrum, focusing on leisure resorts and group segments, which are better positioned than the national hotel average [10][20] - The company has a strong balance sheet and has shown stability in Net Operating Income (NOI), which has been reliable aside from the pandemic [12][24] Group 2: Industry Fundamentals - The hotel industry faces structural challenges, including competition from online travel agencies and short-term rental platforms like Airbnb, which capture significant revenue while hotel owners bear most capital risk [3][4] - The industry is recovering slowly post-COVID, with national hotel revenue at 116% of pre-pandemic levels, primarily driven by Average Daily Rate (ADR) rather than occupancy, which remains weak at 63.4% [6][5] - There is a significant variance in recovery across different hotel segments, with luxury and resort hotels outperforming while economy hotels and those reliant on international travel are underperforming [7][6] Group 3: Financial Metrics and Valuation - PEB's asset value is estimated at $5.485 billion, with a price per key of $459, which is considered reasonable for high-end hotels [22][28] - Funds From Operations (FFO) per share is projected to grow to $1.68 in 2027 and $2.27 by 2028, providing a healthy cushion for preferred dividends [22][24] - The preferreds have a $25 liquidation preference, and the company has ample asset value to protect this preference, with a $2.7 billion cushion after servicing debt and preferreds [24][22] Group 4: Preferred Stock Analysis - PEB-H preferreds offer the highest return potential within the capital stack due to their substantial discount to par and favorable conversion terms in the event of a change of control [29][32] - The current yield for PEB-H is around 6.5%, with a fair price estimated at about $22, indicating a potential 25% upside from current levels [35][31] - The preferreds are well-positioned in terms of downside protection, as they are pari passu with respect to the waterfall in liquidation scenarios [31][32]

Group 1: Core Insights - Pebblebrook (PEB) preferreds are trading at attractive pricing with an 8%+ yield and 45% upside to par, indicating a high return potential relative to the low risk associated with the company's fundamentals [1][22][35] - The hotel industry has faced structural challenges, including competition from online travel agencies and short-term rental platforms, which have impacted revenue for hotel owners [3][4] - The pandemic severely affected the hotel sector, leading to high vacancy rates and negative EBITDA, but Pebblebrook emerged relatively strong due to its solid management and balance sheet [5][6] Group 2: Industry Fundamentals - Nationally, hotel revenue has recovered to 116% of pre-pandemic levels, primarily driven by an increase in Average Daily Rate (ADR), while occupancy rates remain low at 63.4%, down 1.9% year-over-year [6][7] - The recovery varies significantly by market segment, with luxury and resort hotels outperforming economy hotels, particularly those reliant on international travel [7][8] - The construction of new hotels has slowed, which may help balance supply and demand in the long term [7][8] Group 3: Pebblebrook Specifics - Pebblebrook focuses on higher-end RevPAR segments, which are better positioned in the current economic recovery compared to the broader hotel market [10][12] - The company has demonstrated stable Net Operating Income (NOI) and is expected to maintain sufficient cash flow to cover preferred dividends and protect liquidation preferences [16][22] - Pebblebrook's asset value is estimated at $5.485 billion, providing a significant cushion for preferred shareholders [22][24] Group 4: Preferreds Analysis - The preferreds offer higher return potential due to substantial discounts to par, with Series H showing the most upside at 45% compared to other series [29][31] - Preferreds are structured to provide downside protection, with a liquidation preference of $25 per share, and Series H has favorable conversion terms in the event of a change of control [32][31] - Current market conditions, including anticipated interest rate cuts, may increase demand for high-yield investments like PEB-H, which is currently mispriced [34][35]