RLJ Lodging Trust Faces Critical Earnings Test This Week

RLJ Lodging Trust (RLJ) approaches a pivotal moment as the market prepares for its third-quarter 2025 financial results. The real estate investment trust is scheduled to release earnings after markets close on Wednesday, with Wall Street anticipating revenue of $326 million and earnings of $0.28 per share.

The analyst community presents a divided stance toward RLJ Lodging shares. Current consensus positions the stock at "Hold," derived from two buy recommendations, five hold ratings, and one sell suggestion. Price targets display significant variation, ranging from $7.50 to $9.81, with the average hovering around $9.10.

Recent analyst actions have introduced additional pressure. On October 3, Wells Fargo downgraded the stock to "Strong Sell." The same day brought further concerning developments as Robert W. Baird, while maintaining its "Neutral" rating, substantially reduced its price target from $9.00 to $7.50. Baird R W also removed its bullish stance, downgrading the equity from "Strong Buy" to "Hold."

Dividend Sustainability Questions Emerge

RLJ Lodging Trust attracts income-focused investors with its quarterly dividend payment of $0.15 per share, translating to an attractive 8.7% annualized yield. However, this substantial yield comes with concerning underlying metrics. The company's payout ratio stands at an alarming 285.71%, raising legitimate questions about the long-term viability of current dividend levels.

Should investors sell immediately? Or is it worth buying RLJ Lodging?

The upcoming earnings report represents an opportunity for management to address these concerns. Historical performance offers some encouragement—during the second quarter, RLJ surpassed expectations by reporting $0.48 per share against projections of $0.46. For the full 2025 fiscal year, management maintains its guidance range of $1.38 to $1.58 per share.

Technical Levels Approach Critical Test

Trading at $6.93 currently, RLJ shares are testing crucial technical support at $6.89. A decisive break below this level could trigger additional selling pressure, while successfully holding this support zone might signal a potential reversal opportunity for technical traders.

This week's earnings release will likely determine the stock's near-term trajectory. Will RLJ Lodging Trust deliver results that convince skeptical analysts and reignite investor confidence? Or will the quarterly numbers validate existing concerns and push shares lower? The Wednesday announcement promises to provide clarity for market participants monitoring this hospitality-focused REIT.