Why RLJ Lodging Trust Stock Is Back on Investors' Radar

RLJ Lodging Trust (RLJ) has drawn fresh attention after raising its unaudited 2026 net income guidance to a range of $8.6 million to $30.6 million, as well as authorizing a $250 million share repurchase program.

RLJ Lodging Trust's recent guidance upgrade and new buyback have arrived alongside a 22.75% 1 month share price return and a 33.61% 1 year total shareholder return, suggesting momentum has picked up after weaker multi year total returns.

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So with RLJ stock up strongly over the past month yet still trading with an estimated 46.63% intrinsic discount, is the market overlooking value here, or already pricing in the raised 2026 outlook and buyback potential?

Most Popular Narrative: 23.8% Undervalued

With RLJ Lodging Trust last closing at $8.85 against a narrative fair value of $11.62, the most followed valuation story sees meaningful upside still on the table.

Ongoing conversions to higher earning brand affiliations such as Marriott’s Autograph Collection and Hilton’s Tapestry Collection, often in prime, supply constrained locations, are intended to improve brand-driven demand and mix, which management targets to translate into meaningful EBITDA growth and stronger net margins.

Want to see why this valuation leans bullish on RLJ's earnings potential? The narrative leans heavily on future margins, cash generation and a richer mix of revenue. The numbers behind that view are where the real story starts.

Result: Fair Value of $11.62 (UNDERVALUED)

However, this bullish story still hinges on city driven demand and renovation payoffs. Softer event calendars or weaker returns on projects could quickly undermine it.

Next Steps

With both risks on management's radar and clear rewards that have investors optimistic, it pays to move quickly and test the story against your own expectations by checking the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.