Apple Hospitality REIT (APLE): Assessing Valuation After Lowered 2025 Outlook and Weaker Q3 Profit

Apple Hospitality REIT (APLE) released its third quarter earnings and simultaneously lowered its outlook for 2025. The company cited economic uncertainties and a possible government shutdown as key reasons for a reduced net income forecast.

See our latest analysis for Apple Hospitality REIT.

This updated guidance comes after a year marked by downside volatility for Apple Hospitality REIT’s stock. While cost controls and a recent share buyback gave investors some reassurance, the 1-year total shareholder return of -20.9% and year-to-date share price return of -22.9% reflect ongoing uncertainty and fading momentum despite the company’s long-term gain over five years.

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With the stock trading at a notable discount to analyst targets and five-year gains still intact, the key question is whether Apple Hospitality REIT is now undervalued. Alternatively, the market may have already priced in those future challenges and uncertainties for investors considering a buying opportunity.

Most Popular Narrative: 9.7% Undervalued

Apple Hospitality REIT’s most popular narrative places its fair value at $12.92, modestly above the current price of $11.67. This suggests a cautious optimism about potential upside, hinging on a nuanced balance of future earnings and margin trends.

The heavy concentration of assets in specific upscale, select-service segments and in suburban/secondary U.S. markets increases exposure to region-specific economic slowdowns and intense competition. This could compress net operating income and margins if local demand fails to rebound as expected.

Read the complete narrative.

Craving more? The narrative’s fair value hinges on a mix of tough competitive dynamics and surprising margin forecasts. A handful of assumptions about growth, future profit multiples, and market risk could tip the scale. Find out which spark the valuation upside.

Result: Fair Value of $12.92 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, strong asset acquisitions or a shift in travel demand could quickly reverse expectations and challenge the assumptions behind today's case for undervaluation.

Find out about the key risks to this Apple Hospitality REIT narrative.

Build Your Own Apple Hospitality REIT Narrative

Prefer charting your own course? Dive into the numbers and assemble a narrative that fits your outlook. Get started in just a few minutes with Do it your way

A great starting point for your Apple Hospitality REIT research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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