Sunstone Hotel Investors (NYSE:SHO) Releases Quarterly Earnings Results, Beats Estimates By $0.05 EPS

Key Points

• Sunstone reported $0.27 EPS vs. $0.22 expected and revenue was up 10.9% year‑over‑year, and management raised FY2026 guidance to $0.88–$0.96 EPS while forecasting rooms and total RevPAR growth of +5%–7.5% and adjusted EBITDARE of $238M–$252M.
• Operational momentum drove results—rooms RevPAR +14.6% (5.7% ex‑Andaz) and adjusted FFO per diluted share was up 29%—with Andaz Miami Beach ramping quickly (Q1: 86% occupancy, ~$564 ADR; peaks >$900) offering further rate and EBITDA upside.
• Near‑term headwinds include severe March storm damage at Wailea Beach Resort likely pushing 2026 capital spending to the upper half of guidance, and a softer urban portfolio (urban RevPAR down 9.3%) leaving group volatility and event‑driven risks.

Sunstone Hotel Investors (NYSE:SHO - Get Free Report) issued its quarterly earnings results on Tuesday. The real estate investment trust reported $0.27 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.22 by $0.05, Briefing.com reports. Sunstone Hotel Investors had a return on equity of 1.44% and a net margin of 2.56%.During the same period last year, the business posted $0.21 EPS. The business's quarterly revenue was up 10.9% on a year-over-year basis. Sunstone Hotel Investors updated its FY 2026 guidance to 0.880-0.960 EPS.

Here are the key takeaways from Sunstone Hotel Investors' conference call:

• The company reported a strong first quarter with rooms RevPAR +14.6% (5.7% ex‑Andaz) and adjusted FFO per diluted share +29%, driven by broad revenue strength and cost controls.
• Andaz Miami Beach is ramping quickly (Q1: 86% occupancy, ~$564 ADR; some periods >$900 ADR) and management expects continued rate and EBITDA upside as Bazaar and other amenities come online.
• Management raised full‑year guidance—now expecting rooms and Total RevPAR +5%–7.5%, adjusted EBITDARE $238M–$252M and FFO/share $0.88–$0.96—while executing accretive repurchases ($50M+ YTD) and keeping a conservative balance sheet (no maturities before 2028).
• Severe March storms caused wind and water damage at Wailea Beach Resort, prompting repairs and insurance claims and likely pushing 2026 capital spending to the upper half of the guidance range.
• The urban portfolio was softer in Q1 (urban RevPAR down 9.3%, Total RevPAR down 2.9%) due to tough comps and weather; management expects sequential recovery but remains cautious about group volatility, fuel costs and event‑driven uncertainty (e.g., World Cup).

Sunstone Hotel Investors Stock Performance

Sunstone Hotel Investors stock traded up $0.28 during midday trading on Tuesday, hitting $9.99. The stock had a trading volume of 579,496 shares, compared to its average volume of 1,871,867. The firm's fifty day moving average is $9.34 and its two-hundred day moving average is $9.23. The company has a market capitalization of $1.89 billion, a PE ratio of 249.69, a P/E/G ratio of 2.81 and a beta of 0.96. Sunstone Hotel Investors has a 52-week low of $8.14 and a 52-week high of $10.27. The company has a current ratio of 2.94, a quick ratio of 2.94 and a debt-to-equity ratio of 0.55.

Sunstone Hotel Investors Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Wednesday, April 15th. Investors of record on Tuesday, March 31st were issued a $0.09 dividend. This represents a $0.36 annualized dividend and a yield of 3.6%. The ex-dividend date of this dividend was Tuesday, March 31st. Sunstone Hotel Investors's dividend payout ratio is currently 900.00%.

Analyst Upgrades and Downgrades

SHO has been the subject of a number of research reports. Robert W. Baird reiterated a "neutral" rating and set a $10.00 target price on shares of Sunstone Hotel Investors in a research note on Monday, January 12th. Wells Fargo & Company decreased their target price on shares of Sunstone Hotel Investors from $11.00 to $10.00 and set an "overweight" rating for the company in a research note on Tuesday, March 24th. Truist Financial upped their price target on shares of Sunstone Hotel Investors from $10.00 to $11.00 and gave the company a "hold" rating in a research report on Thursday, March 26th. Wall Street Zen raised shares of Sunstone Hotel Investors from a "sell" rating to a "hold" rating in a research report on Saturday, February 28th. Finally, LADENBURG THALM/SH SH assumed coverage on shares of Sunstone Hotel Investors in a research report on Thursday, March 26th. They set a "hold" rating and a $10.00 price target for the company. Two analysts have rated the stock with a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $10.00.

Institutional Investors Weigh In On Sunstone Hotel Investors

Several hedge funds and other institutional investors have recently added to or reduced their stakes in SHO. Royal Bank of Canada increased its holdings in Sunstone Hotel Investors by 13.9% in the 1st quarter. Royal Bank of Canada now owns 69,862 shares of the real estate investment trust's stock worth $658,000 after acquiring an additional 8,504 shares in the last quarter. AQR Capital Management LLC increased its stake in Sunstone Hotel Investors by 1.6% in the 1st quarter. AQR Capital Management LLC now owns 83,864 shares of the real estate investment trust's stock worth $789,000 after buying an additional 1,307 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in Sunstone Hotel Investors by 3.1% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 119,358 shares of the real estate investment trust's stock worth $1,123,000 after buying an additional 3,607 shares in the last quarter. Goldman Sachs Group Inc. increased its stake in Sunstone Hotel Investors by 132.6% in the 1st quarter. Goldman Sachs Group Inc. now owns 2,787,519 shares of the real estate investment trust's stock worth $26,231,000 after buying an additional 1,589,258 shares in the last quarter. Finally, United Services Automobile Association purchased a new stake in Sunstone Hotel Investors in the 1st quarter worth $120,000. 99.37% of the stock is owned by hedge funds and other institutional investors.

About Sunstone Hotel Investors

Sunstone Hotel Investors, Inc NYSE: SHO is a publicly traded real estate investment trust (REIT) focused on acquiring, owning and asset‐managing upper‐upscale extended‐stay and premium‐branded hotel properties in the United States. The company's business model centers on generating stable, long‐term cash flows through franchise agreements and third‐party management contracts with established hotel operators.

As of the most recent reporting period, Sunstone's portfolio includes approximately 97 hotels and nearly 25,000 guest rooms across 19 states, with concentrations in major metropolitan and select high‐growth secondary markets.

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