Sunstone Hotel Investors, Inc. (SHO)

Price$11.06Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkShares sit near a reasonable FFO valuation, with only modest upside implied by analyst targets.

Sunstone Hotel Investors, Inc. trades on the New York Stock Exchange under ticker SHO. Using the latest confirmed market close available from the price source, the shares trade at roughly 11.4 times the midpoint of management’s 2026 adjusted FFO guidance. FFO is a REIT earnings measure that adds back real-estate depreciation and removes some nonrecurring items. That multiple is not obviously cheap for a cyclical hotel owner, while consensus targets imply only high-single-digit upside, supporting a fair-priced view.

Big pictureEarnings are improving, and asset-sale proceeds leave a meaningful liquidity cushion for a cyclical business.

Second-quarter adjusted FFO per diluted share rose 14.3%, while adjusted EBITDAre increased 5.5%. Management lifted full-year adjusted FFO guidance to $0.93-$0.98 per diluted share, suggesting better cash-generating power than previously expected. After the San Francisco hotel sale and revolver repayment, Sunstone estimated about $430 million of cash, including restricted cash, against $955 million of debt and a fully available $500 million revolver. That gives resilience, although planned 2026 hotel investment of about $105-$115 million still absorbs meaningful cash.

Business strengthPremium hotels, improving room revenue, and disciplined buybacks help, but demand remains economically sensitive.

Sunstone’s portfolio is concentrated in convention, urban, and resort hotels, so pricing and occupancy can rise strongly in good travel markets but weaken quickly in downturns. Management expects 2026 RevPAR, or room revenue per available room, to grow 7%-9%, with the renovated Andaz Miami Beach providing a large contribution. Debt maturities are generally pushed out, and 59.2% of debt was fixed or swapped to fixed at June quarter-end. The Hyatt San Francisco sale at a 3.5% capitalization rate, meaning property income divided by price, also supports healthy private-market asset values. Repurchases strengthen per-share economics when done below asset value.

What could change the storyFaster hotel growth could create upside; weaker travel, costly capital, or dilution could pressure returns.

The bull case assumes 7%-9% RevPAR growth holds, Andaz Miami Beach and the Hilton Key West conversion mature successfully, and excess sale cash is invested or used for buybacks at attractive discounts. The bear case assumes lodging demand slows, wage, insurance, or renovation costs rise, and higher interest rates bite as some swaps expire. A new $300 million at-the-market equity program replaced an unused prior program and adds forward-sale flexibility; it creates no immediate dilution, but future issuance below intrinsic value would weaken existing owners’ returns.

AI: News

Q2 outlook risesSecond-quarter earnings improved, and management raised its full-year operating and adjusted FFO expectations.

On August 6, Sunstone reported second-quarter net income attributable to common stockholders of $26.0 million. Portfolio RevPAR increased 9.3%, adjusted EBITDAre rose 5.5%, and adjusted FFO per diluted share increased 14.3%. Management also raised 2026 guidance, including adjusted FFO to $0.93-$0.98 per diluted share and RevPAR growth to 7%-9%. The update signals stronger near-term operating momentum, though management still highlighted macroeconomic, policy, and sentiment risks.

Hyatt sale closesSunstone completed a major hotel sale, boosting cash and fully repaying its revolving credit balance.

The company completed the $279 million sale of the 821-room Hyatt Regency San Francisco on July 30. The announced sale price equated to a 21.4 times hotel adjusted EBITDAre multiple and a 3.5% capitalization rate on trailing hotel net operating income. Sunstone used part of the proceeds to repay the $25 million revolver balance. Pro forma for the sale and repayment, management estimated about $430 million of cash including restricted cash and $955 million of debt.

New ATM programSunstone refreshed its equity program, preserving financing flexibility while retaining potential future dilution risk.

On August 10, Sunstone entered a new equity distribution agreement permitting up to $300 million of common-stock sales, including forward-sale transactions. The company simultaneously terminated its prior at-the-market program, under which the same $300 million capacity remained unused, so headline authorization did not increase. An August 7 credit-agreement amendment supported the forward-sale structure. No issuance was announced in the filing, but future use could dilute shareholders if stock is sold at unattractive valuations.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009
Revenue	$960.1M	$905.8M	$986.5M	$912.1M	$509.1M	$267.9M	$1.12B	$1.16B	$1.19B	$1.19B	—	—	—	—	—	—	—
Operating expenses	$884.4M	$827.2M	$867.8M	$816.2M	$597.3M	$661.8M	$977.8M	$977.2M	$1.05B	$1.02B	—	—	—	—	—	—	—
Operating income	$75.7M	$78.6M	$118.7M	$99.3M	—	—	—	$298.9M	$186.5M	$188.8M	$180.4M	$156.7M	$99.2M	$79.0M	$42.7M	$27.6M	$4.1M
Operating margin	7.89%	8.68%	12.03%	10.89%	—	—	—	25.78%	15.62%	15.88%	—	—	—	—	—	—	—
EBITDA	$208.5M	$214.3M	$387.3M	$249.2M	—	—	—	$445.3M	$345.1M	$351.8M	$345.2M	$312.6M	$236.7M	$209.9M	$156.4M	$107.2M	$96.5M
EBITDA margin	21.71%	23.66%	39.26%	27.33%	—	—	—	38.42%	28.91%	29.58%	—	—	—	—	—	—	—
Net income	$24.6M	$43.3M	$206.7M	$90.8M	$33.0M	−$410.5M	$142.8M	$259.1M	$153.0M	$140.7M	$355.5M	$87.9M	$70.0M	$49.6M	$81.3M	$38.5M	−$269.6M
Net profit margin	2.56%	4.78%	20.95%	9.95%	6.48%	−153.23%	12.80%	22.35%	12.82%	11.83%	—	—	—	—	—	—	—
Basic EPSper basic share	$0.04	$0.14	$0.93	$0.34	$0.06	-$1.93	$0.54	$1.05	$0.59	$0.55	$1.62	$0.37	$0.29	$0.14	$0.45	$0.18	-$4.17
Diluted EPSper diluted share	$0.04	$0.14	$0.93	$0.34	$0.06	-$1.93	$0.54	$1.05	$0.59	$0.55	$1.62	$0.37	$0.29	$0.14	$0.45	$0.18	-$4.17

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Owners

Reported shareholders

Reference date Jun 30, 2026

18.89%of listed shares

BlackRock, Inc.35.12M shares · Jun 30, 2026

View holders

Top 20 reported holders of SHO
Holder	% owned
BlackRock, Inc.	18.89%35.12M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	10.61%19.74M shares
STATE STREET CORP	5.78%10.74M shares
Blackstone Inc.	4.61%8.58M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.49%8.36M shares
BANK OF AMERICA CORP /DE/	3.34%6.21M shares
GEODE CAPITAL MANAGEMENT, LLC	2.79%5.2M shares
Woodline Partners LP	2.49%4.62M shares
PRUDENTIAL FINANCIAL INC	2.44%4.53M shares
Nuveen, LLC	2.30%4.27M shares
CHARLES SCHWAB INVESTMENT MANAGEMENT INC	2.27%4.21M shares
CITADEL ADVISORS LLC	2.22%4.12M shares
JPMORGAN CHASE & CO	2.04%3.8M shares
GOLDMAN SACHS GROUP INC	2.01%3.73M shares
H/2 CREDIT MANAGER LP	1.82%3.39M shares
Qube Research & Technologies Ltd	1.68%3.12M shares
ADAGE CAPITAL PARTNERS GP, L.L.C.	1.67%3.1M shares
Legal & General Group Plc	1.56%2.89M shares
NORTHERN TRUST CORP	1.49%2.78M shares
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	1.43%2.65M shares