DiamondRock Hospitality's Q2 net income rises 73.8%

Overview

• DiamondRock Q2 net income rises 73.8% yr/yr to $38.4 mln

• Completed $1.5 bln refinancing, no debt maturities until 2028, repurchased 3.6 mln shares YTD

Outlook

• DiamondRock raises midpoint of 2025 Adjusted EBITDA guidance

• Company expects full-year Adjusted FFO per share between $0.96 and $1.06

• DiamondRock anticipates stabilization in travel patterns in high-end portfolio

• Company sees out-of-room revenues as bright spot in second half of 2025

Result Drivers

• OUT-OF-ROOM REVENUES - Co attributes stronger than expected total RevPAR to a 3.1% increase in out-of-room revenues

• PROPERTY TAX IMPACT - Larger than anticipated property tax increase in Chicago affected EBITDA margins, but excluding this, margins expanded by 30 basis points

• REFINANCING - Completed $1.5 bln refinancing, extending debt maturities and increasing financial flexibility

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialized reits peer group is "buy"

• Wall Street's median 12-month price target for Diamondrock Hospitality Co is $9.00, about 15.8% above its August 6 closing price of $7.58

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nPn43NP1Za