Sunstone Hotel Investors (NYSE:SHO) Posts Earnings Results, Beats Estimates By $0.06 EPS

by · The Cerbat Gem

Sunstone Hotel Investors (NYSE:SHO – Get Free Report) released its quarterly earnings data on Thursday. The real estate investment trust reported $0.14 earnings per share for the quarter, topping analysts’ consensus estimates of $0.08 by $0.06, FiscalAI reports. Sunstone Hotel Investors had a return on equity of 3.21% and a net margin of 5.30%.The firm had revenue of $277.11 million during the quarter, compared to analyst estimates of $266.67 million. Sunstone Hotel Investors updated its FY 2026 guidance to 0.930-0.980 EPS.

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

  • Second-quarter performance exceeded expectations: RevPAR rose 9.3%, adjusted EBITDAre increased 6% to $77 million, and adjusted FFO per diluted share grew 14% to $0.32, helped by strong leisure, group and corporate demand and share repurchases.
  • Sunstone raised its 2026 outlook, now expecting comparable portfolio RevPAR growth of 7%–9%, adjusted EBITDAre of $245 million–$255 million, and adjusted FFO per diluted share of $0.93–$0.98. Management cited broad-based forward demand, including strong transient pace and improved group and citywide calendars in 2027.
  • The company completed the sale of Hyatt Regency San Francisco at nearly a 20-times trailing EBITDA multiple and has used part of the proceeds to repurchase approximately $40 million of common stock and nearly $30 million of preferred stock, with additional capital recycling and buybacks under consideration.
  • Several investments are beginning to support future growth, including the completed San Diego meeting-space renovation, the planned fall opening of Bazaar Meat at Andaz Miami Beach, and the conversion of Oceans Edge Resort to Hilton Key West Resort & Marina, which is already showing improved ADR and longer booking windows.
  • Expense growth remained a margin headwind, with comparable expenses excluding Andaz rising 4.4% and margins declining by 100 basis points; San Diego was particularly affected by weaker group demand and renovation disruption. Full-year capital expenditure guidance increased to $105 million–$115 million due to storm-related repairs at Wailea, although management expects most of the added spending to be reimbursed by insurance.

Sunstone Hotel Investors Price Performance

Shares of SHO stock traded down $0.18 during trading hours on Friday, hitting $11.11. The stock had a trading volume of 3,020,913 shares, compared to its average volume of 2,351,649. The company has a debt-to-equity ratio of 0.59, a current ratio of 7.01 and a quick ratio of 3.42. The stock has a market capitalization of $2.07 billion, a price-to-earnings ratio of 50.52, a PEG ratio of 2.25 and a beta of 0.97. Sunstone Hotel Investors has a one year low of $8.61 and a one year high of $12.07. The stock’s 50-day moving average price is $11.55 and its two-hundred day moving average price is $10.22.

Sunstone Hotel Investors Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, October 15th. Stockholders of record on Wednesday, September 30th will be issued a $0.09 dividend. This represents a $0.36 annualized dividend and a dividend yield of 3.2%. The ex-dividend date of this dividend is Wednesday, September 30th. Sunstone Hotel Investors’s payout ratio is 327.27%.

Insider Buying and Selling

In related news, insider Robert C. Springer sold 89,631 shares of the stock in a transaction that occurred on Wednesday, June 24th. The stock was sold at an average price of $11.62, for a total transaction of $1,041,512.22. Following the completion of the transaction, the insider directly owned 573,743 shares of the company’s stock, valued at approximately $6,666,893.66. This represents a 13.51% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Insiders own 1.40% of the company’s stock.

Institutional Trading of Sunstone Hotel Investors

A number of large investors have recently added to or reduced their stakes in the company. Balyasny Asset Management L.P. bought a new position in Sunstone Hotel Investors during the second quarter valued at $41,332,000. Woodline Partners LP bought a new stake in shares of Sunstone Hotel Investors in the 3rd quarter worth about $44,295,000. Alyeska Investment Group L.P. increased its holdings in shares of Sunstone Hotel Investors by 86.8% in the 4th quarter. Alyeska Investment Group L.P. now owns 5,369,789 shares of the real estate investment trust’s stock worth $48,006,000 after buying an additional 2,495,914 shares during the last quarter. Goldman Sachs Group Inc. increased its holdings in shares of 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 during the last quarter. Finally, Bank of America Corp DE raised its position in shares of Sunstone Hotel Investors by 13.6% during the 2nd quarter. Bank of America Corp DE now owns 7,240,157 shares of the real estate investment trust’s stock valued at $62,845,000 after buying an additional 867,137 shares in the last quarter. Institutional investors own 99.37% of the company’s stock.

Analyst Ratings Changes

A number of research analysts recently commented on the company. Weiss Ratings reissued a “hold (c)” rating on shares of Sunstone Hotel Investors in a report on Friday, July 10th. Wall Street Zen lowered shares of Sunstone Hotel Investors from a “buy” rating to a “hold” rating in a report on Saturday. Citigroup lifted their price objective on shares of Sunstone Hotel Investors from $9.50 to $10.00 and gave the company a “neutral” rating in a research report on Wednesday, May 6th. Zacks Research cut shares of Sunstone Hotel Investors from a “strong-buy” rating to a “hold” rating in a research report on Thursday, July 23rd. Finally, JPMorgan Chase & Co. boosted their target price on shares of Sunstone Hotel Investors from $9.00 to $10.00 and gave the stock an “underweight” rating in a report on Tuesday, July 21st. One investment analyst has rated the stock with a Strong Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the stock presently has an average rating of “Hold” and an average target price of $10.67.

Get Our Latest Research Report on SHO

Sunstone Hotel Investors News Roundup

Here are the key news stories impacting Sunstone Hotel Investors this week:

  • Positive Sentiment: Q2 results beat expectations: Sunstone reported EPS of $0.14 versus the $0.08 consensus estimate and revenue of $277.1 million versus expectations of $266.7 million. Net income increased to $26.0 million from $10.8 million a year earlier. Sunstone Hotel Q2 Earnings Snapshot
  • Positive Sentiment: Funds from operations improved: Adjusted FFO rose 14.3% year over year to $0.32 per share, exceeding the $0.30 consensus estimate and supporting the REIT’s ability to maintain its dividend. Sunstone Hotel Investors Tops Q2 FFO and Revenue Estimates
  • Positive Sentiment: 2026 guidance was raised: Management now expects full-year EPS of $0.93-$0.98, above the $0.91 analyst consensus. It also projects 2026 net income of $79 million-$89 million. Sunstone Hotel Investors Reports Second Quarter 2026 Results
  • Positive Sentiment: Hotel fundamentals strengthened: Companywide RevPAR increased 9.3% to $263.61, while total RevPAR rose 7.7% to $434.00. Adjusted EBITDAre also increased 5.5% to $76.7 million.
  • Positive Sentiment: Asset sale improved liquidity: Sunstone completed the $279 million sale of the Hyatt Regency San Francisco to Blackstone-affiliated funds, giving the hotel REIT additional capital flexibility.
  • Neutral Sentiment: Dividend announcements: Sunstone declared its regular $0.09-per-share quarterly common dividend, payable October 15, and a $0.3562 dividend on its 5.70% Series I preferred stock. These reinforce shareholder returns but are not new earnings drivers.

About Sunstone Hotel Investors

(Get Free Report)

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.

Read More