After Pebblebrook reported lower than expected revenue but higher than expected AFFO, RBC Capital says that the company's earnings were impressive. The firm says that the company was hurt by near-term uncertainty regarding its Kimpton hotels and a negative mix shift due to the launch of a number of new hotels. However, the firm does not expect issues facing the Kimpton hotels to reduce the company's near-term cash flow by more than 1.5%. It trimmed its price target on the name to $50 from $52 but keeps an Outperform rating.

The company stated: "Business demand-both group and transient-continued to recover, driving increased occupancy in Washington D.C., San Diego, San Francisco, Los Angeles, and Boston. Leisure demand remained roughly in line with the prior year, despite bad weather impacting many weekends in Florida and on the West Coast; the Company's resorts continue to maintain significant ADR premiums to 2019. Recently redeveloped hotels-including Hilton San Diego Gaslamp Quarter, Margaritaville Hotel San Diego Gaslamp Quarter, Viceroy Santa Monica Hotel, L'Auberge Del Mar, 1 Hotel San Francisco, and Estancia La Jolla Hotel & Spa-are demonstrating the benefits of their substantial investments with healthy gains in RevPAR, market share, cash flow, and future bookings."