Analyst: Buy This Stock After Market Volatility

PEB has been recovering since hitting an annual low last month

by Karee Venema

Published on Nov 12, 2018 at 10:53 AM

Stifel raised its rating on Pebblebrook Hotel Trust (NYSE:PEB) to "buy" from "hold," and raised its price target on the real estate investment trust (REIT) to $38 from $37 -- an 11.2% premium to last Friday's close. The brokerage firm pointed to an attractive entry point following recent stock market volatility, and that it expects the shares to outperform once Pebblebrook's merger with LaSalle Hotel Properties (LHO) is completed later this month.

Today's bull note just echoes the broader outlook seen among the brokerage bunch, with the majority of the 10 analysts in coverage maintaining a "buy" or better rating. Plus, the average 12-month price target of $39.60 is a healthy 15.5% premium to PEB stock's current price.

Short sellers, on the other hand, have been actively targeting the REIT. Short interest has nearly doubled since August to 13.7 million shares. This represents more than one-fifth of PEB's available float, or 9.6 times the average daily pace of trading.

Looking at the charts, PEB has been recovering since its Oct. 19 annual low of $31.06, up 10.3% to trade at $34.26. However, this rally appears to be running out of steam near $34.50 -- a level that's served as support and resistance throughout 2018, and is currently home to the stock's 50-day moving average.

peb stock daily chart on nov 12


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