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Growth Investors: Industry Analysts Just Upgraded Their Pebblebrook Hotel Trust (NYSE:PEB) Revenue Forecasts By 12%

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Celebrations may be in order for Pebblebrook Hotel Trust (NYSE:PEB) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Pebblebrook Hotel Trust will make substantially more sales than they'd previously expected.

After this upgrade, Pebblebrook Hotel Trust's ten analysts are now forecasting revenues of US$724m in 2021. This would be a huge 82% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 29% to US$2.48. However, before this estimates update, the consensus had been expecting revenues of US$645m and US$2.66 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for Pebblebrook Hotel Trust

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There was no major change to the consensus price target of US$25.43, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Pebblebrook Hotel Trust analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$20.50. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pebblebrook Hotel Trust's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Pebblebrook Hotel Trust is forecast to grow faster in the future than it has in the past, with revenues expected to display 231% annualised growth until the end of 2021. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.4% annually. Not only are Pebblebrook Hotel Trust's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Pebblebrook Hotel Trust is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Pebblebrook Hotel Trust.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Pebblebrook Hotel Trust to be able to reach break-even within the next few years. For more information, you can click through to our free platform to learn more about these forecasts.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

This article by Simply Wall St is general in nature. 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.

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