Wells downgrades ‘show-me story’ RLJ Lodging Trust to Underweight

Wells Fargo downgraded RLJ Lodging Trust to Underweight from Equal Weight with a price target of $9, down from $11. The firm says that despite giving RLJ the benefit of a smaller enterprise value to EBITDA discount to peers than achieved historically, the company has the second lowest share price return expectation in its lodging coverage. RLJ is a “show-me story” in the near-term following a relatively large guidance cut in Q2, the largest consensus EBITDA decline since early 2024 and a likely slowing business transient growth environment, the analyst tells investors in a research note. Wells also has concerns on leisure growth with the company’s less upper end-leaning portfolio than peers.