# Apple Hospitality earns about what it earned per share in 2018 and trades at $18.87; my Base is $18.96, so the verdict is hold APLE, New York Stock Exchange. Published November 9, 2026. Price as of the November 6, 2026 regular session close. Values in US dollars. Latest reported quarter: July to September 2026, released on November 5, 2026. ## Verdict: HOLD at $18.87 At $18.87 Apple Hospitality trades almost exactly at my Base value of $18.96. The price asks for a 7.2% cap rate on next year's hotel income, close to what the company itself got for older hotels it is selling. Confidence is B, so the required margin of safety is 30%, and new money waits for $13.27 or less. - Bear value: $13.19 - Base value: $18.96 - Bull value: $22.23 - Upside to base value: +0.5% - Maximum buy price: $13.27 - Required margin of safety: 30% - What the price implies: a 7.2% cap rate on 2027 hotel income, or cash flow growing 2.4% a year forever at a 10% required return - Enterprise value: $6.0 billion, 12.3 times 2026 adjusted EBITDAre, about $208,000 per room - Third quarter 2026: comparable RevPAR $133.60 (+7.3%), MFFO $0.50 a share (+16.3%), October RevPAR about +10% - Net debt: $1.45 billion plus $111 million of ground leases, about 3.2 times EBITDA - Dividend: $0.96 a year paid monthly, yield 5.1%, 71% of my 2027 cash flow - Business quality: 52.5/100 - Valuation score: 42.5/100 - Confidence: 18.75/25, grade B In 2018 Apple Hospitality earned $1.72 of modified funds from operations (MFFO, the cash earnings measure it reports) per share. For 2026 the midpoint of its new guidance works out to about $1.71. And since January that measure no longer subtracts stock-based pay; on the old definition 2026 is about $1.65. The share price, meanwhile, hit a 52-week high of $18.98 on November 6 and closed at $18.87, above the roughly $16.26 it ended 2019 at, when the 10-year Treasury yielded under 2% instead of 5%. None of that makes the stock expensive by itself. The hotels are full again, the quarter was strong and the balance sheet is one of the lightest in the sector. It does mean the easy part of the recovery is already in the price: my Base value is $18.96, 0.5% above the market. The Bear value is $13.19, 30.1% below, and the Bull value is $22.23, 17.8% above. I assign no probabilities to the cases. The verdict is Hold, with new money waiting for $13.27 or less. Valuation route: a property REIT that owns select-service hotels and pays a monthly dividend. The primary method discounts five years of cash flow to shareholders after hotel capital spending, interest and stock pay, plus a terminal value. The cross-check is a private-market value of the hotels at a cap rate, minus corporate costs, debt and ground leases. Both use the same net debt and share count. Values are present fair-value estimates in US dollars, not 12-month price targets. ## What Apple Hospitality is Apple Hospitality, based in Richmond, Virginia, owns 216 hotels with 29,459 rooms in 83 markets across 37 states and Washington, DC. These are the Hampton Inns, Courtyards, Hilton Garden Inns, Residence Inns and Homewood Suites you pass near an airport, an office park or a downtown: 114 Hilton hotels, 96 Marriott, five Hyatt and one independent. It owns them; third-party firms run them under brand franchises. The company has 64 employees. The model is deliberately plain. Rooms-focused hotels have small restaurants and little meeting space, so a large share of revenue reaches the bottom line, and the portfolio is spread so widely that its biggest market, Portland, Maine, was only 6.9% of hotel profit in the third quarter. In January 13 hotels that Marriott managed directly moved to franchise agreements with other operators, which frees them to be sold without a management contract attached. ## The latest results | $ million unless noted | Q3 2026 | Change | 2026 guidance | | --- | --- | --- | --- | | Comparable RevPAR | $133.60 | +7.3% | +5.1% to +6.1% | | Comparable hotel EBITDA margin | 37.1% | +2.1 points | 35.0% to 35.5% | | Adjusted EBITDAre | 139.7 | +13.3% | 482 to 493 | | MFFO per share | $0.50 | +16.3% | about $1.71 (my arithmetic) | | Net income | 60.5 | +18.9% | 177 to 192 | RevPAR (revenue per available room) rose in every month of the quarter, and the company says October was up about 10%. Part of that is an easy comparison with last year's government shutdown; the CFO put the underlying October growth at 7% to 8%. Hotel expenses grew 3.7%, about half as fast as revenue, which is why 63 cents of each extra revenue dollar reached hotel profit. Management raised the full-year range for adjusted EBITDAre (earnings before interest, taxes, depreciation and amortization for real estate, with stock pay added back) by $23 million at the midpoint. ## Which numbers to trust - **MFFO changed its definition this year.** Since January 1, 2026, both MFFO and adjusted EBITDAre add back stock-based pay, about $13.6 million in 2026. The company restated prior years, so growth rates are comparable, but the cost is real. I subtract it again. - **MFFO is before hotel capital spending.** The company plans $85 million to $95 million for 2026, about 6% of revenue, which it says is its long-run average. I deduct 6% of revenue every year. What remains, after interest and stock pay, is what I call cash flow to shareholders (often labeled AFFO). - **Ground leases are debt.** $110.6 million of finance lease liabilities sit outside the headline debt figure; their interest is inside the interest line. I add them to net debt. - **Hotel cash is close to profit.** Cash taxes are about $1 million a year as a REIT, and working capital is small. There is no tax shield to normalize away. ## Cash, shares and capital returns Total debt was $1,490.3 million at the end of September at a weighted rate of about 4.9%, with $42.7 million of cash and $700 million undrawn on the revolver. After the July refinancing there is no significant maturity before 2029, and after an October mortgage repayment 210 of the 216 hotels are unencumbered. Five hotels are under contract for $71.8 million; I assume they close, take about $70.4 million of net proceeds off the debt and take their profit out of next year. Including the ground leases, my net claim on the hotels is $1,487.8 million. There are 236.1 million shares and no buybacks this year. In 2025 the company bought back about 4.6 million shares, the last batch at an average of $11.77. With the stock now 60% higher, the CEO said the cash is more likely to go into acquisitions and that the company could become "meaningfully more acquisitive". That matters for the valuation: I assume new hotels are bought at a fair price, so they add size but no value. Two forward purchases, a $65.5 million AC Hotel in Anchorage in late 2027 and a $143.7 million AC Hotel and Residence Inn in Las Vegas in 2028, are treated the same way. ## Primary valuation: five years of cash flow to shareholders The Base starts from the 2026 guidance midpoint without the five hotels being sold: about $1,466 million of hotel revenue (my estimate) and $514.8 million of hotel EBITDA. Revenue grows 3.5% in 2027, 3.0% in 2028 and 2.5% a year after that; the hotel margin stays at 35.3%, just above this year's guided 35.25%. Corporate costs and stock pay rise 3% a year, capital spending is 6% of revenue and debt stays flat, so interest is about $77.5 million. I discount at 10% a year, about 5 points over the 10-year Treasury, with 2.5% growth after 2031. | Base, $ million | 2027 | 2028 | 2029 | 2030 | 2031 | | --- | --- | --- | --- | --- | --- | | Hotel revenue | 1,517.3 | 1,562.8 | 1,601.9 | 1,641.9 | 1,683.0 | | Hotel EBITDA | 535.6 | 551.7 | 565.5 | 579.6 | 594.1 | | Adjusted EBITDAre | 501.1 | 516.1 | 528.9 | 541.9 | 555.3 | | Cash before financing | 395.0 | 406.8 | 416.8 | 427.0 | 437.4 | | Cash to shareholders | 317.4 | 329.3 | 339.3 | 349.4 | 359.9 | | Per share | $1.34 | $1.39 | $1.44 | $1.48 | $1.52 | The rest of 2026 is worth $27.6 million today, 2027 to 2031 $1,321.0 million and everything after 2031 $3,157.3 million, so the terminal value is 70.1% of the total. Equity value is $4,505.9 million, or **$19.08** a share. Cash to shareholders is the same as cash after interest here, because no debt is repaid or added. | Discount rate | Growth 2.0% | Growth 2.5% | Growth 3.0% | | --- | --- | --- | --- | | 9% | $20.72 | $21.94 | $23.37 | | 10% | $18.19 | $19.08 | $20.11 | | 11% | $16.22 | $16.90 | $17.66 | A point of discount rate is worth $2 to $3 a share in this model. With the 10-year Treasury at 5.13% in October, I would not go below 10% for a business whose income falls fast in a recession. ## Secondary valuation: what the hotels would sell for The cross-check asks what a buyer would pay for the hotels one by one. 2027 hotel EBITDA of $535.6 million, less a standard 4% of revenue set aside for furniture and equipment, gives net operating income of $474.9 million. At a 7.25% cap rate the hotels are worth $6,550.6 million, about $226,500 per room. From that I take corporate costs and stock pay of $48.5 million a year, capitalized at $646.8 million, add the $16.9 million already spent on the Las Vegas project and subtract the $1,487.8 million of net debt and ground leases. That leaves $4,432.8 million, or **$18.77** a share. Why 7.25%? HVS put the average US hotel cap rate at 7.7% in the second quarter of 2026, a figure pulled up by older and troubled hotels. Apple Hospitality's own six sales this year (one closed, five under contract), older hotels with lower growth, add up to $81 million at a 6.8% cap rate before their planned renovations. A newer, cleaner portfolio sits between those two. At 6.75% the value is $20.83; at 8.0% it is $16.17. | Base, same net debt and shares | Cash flow model | Asset value | Market price | | --- | --- | --- | --- | | Equity value, $ million | 4,505.9 | 4,432.8 | 4,455.3 | | Enterprise value, $ million | 5,993.7 | 5,920.6 | 5,943.1 | | Times 2027 adjusted EBITDAre | 11.96 | 11.82 | 11.86 | | Value per share | $19.08 | $18.77 | $18.87 | The two methods are 1.6% apart. Both start from the same 2027 hotel profit, so the agreement only says the discount rate and the cap rate are consistent with each other, not that the profit forecast is right. The table uses net debt after the pending hotel sales; on today's balance sheet the enterprise value is $6.0 billion. ## History and earnings check | Year end | Share price | MFFO per share | Price to MFFO | | --- | --- | --- | --- | | 2019 | $16.26 (my calculation) | $1.63 | 10.0 | | 2024 | $15.35 | $1.61 | 9.5 | | 2025 | $11.85 | $1.52 | 7.8 | | Now, 2026E old definition | $18.87 | $1.65 | 11.4 | On the definition used before 2026, the stock trades at 11.4 times this year's MFFO, the highest of these year-end points, and the starting dividend is lower: $0.96 a year against $1.20 in 2019. A year ago the market priced the stock as if hotels were in decline; now it prices them as a steady business with modest growth. My model agrees with the second view, which is exactly why there is no margin left. The 2019 price is derived from the company's year-end debt-to-capitalization figure and share count. The growth-adjusted price to earnings ratio is not meaningful for a REIT whose accounting earnings are cut by depreciation. ## Valuation triangulation - Cash flow model (weight 60%): $19.08. - Asset value (weight 40%): $18.77. - Base value: **$18.96**, inside the method range of $18.77 to $19.08. - The cash flow model gets more weight because it carries capital spending, stock pay and interest explicitly; the asset value depends on one cap rate. ## What is the market already pricing in? | Reverse valuation at $18.87 | Result | | --- | --- | | Cap rate on 2027 hotel income | 7.23% | | Growth after 2031 at a 10% return | 2.39% a year | | Return per year if the Base comes true | 10.1% | | Price to 2027 cash to shareholders | 14.0 times, a 7.1% yield | | Price per room, today's balance sheet | about $208,000 | The market is not asking for heroics. It asks for my Base: a few years of low single-digit growth and margins holding near this year's level. It also prices the hotels close to what it costs to build one. HVS puts the median development cost of a select-service hotel at about $200,000 a room and an upscale extended-stay hotel at about $265,000, so the old argument that the shares were a cheap way to own hotels below replacement cost no longer holds the way it did at $12. If the market keeps paying 14.0 times next year's cash to shareholders, the Base returns about 10.2% a year over five years, made up of a 7.1% cash yield and about 3.2% a year of per-share growth. Without any change in the multiple, that is a fair return for the risk, not a bargain. ## Bear, base and bull scenarios | Case | 2027 revenue | 2027 hotel margin | Growth after 2031 | Cap rate | Value | Versus price | | --- | --- | --- | --- | --- | --- | --- | | Bear | -8.0% | 32.0% | 2.0% | 8.25% | $13.19 | -30.1% | | Base | +3.5% | 35.3% | 2.5% | 7.25% | $18.96 | +0.5% | | Bull | +5.5% | 36.0% | 3.0% | 6.75% | $22.23 | +17.8% | - **Bear:** a recession cuts business travel in 2027; revenue falls 8% and the margin drops to 32%, recovering to 35% only by 2031. Buyers demand an 8.25% cap rate in a weak year. Cash flow model $15.04, asset value $10.42. Cash to shareholders in 2027 is $0.95 a share, just under the $0.96 dividend. - **Base:** as described above. Cash flow model $19.08, asset value $18.77. - **Bull:** the business travel recovery runs another two years with little new supply; revenue grows 5.5% and 4.5% and margins reach 36.3%. Cash flow model $22.33, asset value $22.09. Each case blends the two methods 60/40. The discount rate is 10% in all three. In the Bear, lower income and a higher cap rate move together on purpose: hotel buyers pay less when hotel income is falling, and that is one shock, not two. ## How the buy price is set Confidence is B, which means a margin of safety of 30%. The data are clean and the structure is simple; the grade is not higher because 2027 hotel demand is a forecast without company guidance yet, and I did not have a dated set of peer valuations. I add nothing for cyclicality: that risk is already in the Bear. That gives a maximum buy price of **$13.27**. A point of discount rate moves the Base to $20.68 or $17.65. Half a point of cap rate in the asset value moves it to $19.78 or $17.92. A point of hotel margin in every year is worth $0.89 either way, capital spending at 5% or 7% of revenue gives $19.49 or $18.43, and 2 points more or less revenue growth in 2027 gives $19.48 or $18.44. For scale, $10 million a year of extra hotel costs is worth $0.56 a share and $100 million of extra debt $0.35. No single input moves the value by more than 9.1%. For scale, the expected return under my Base is about 13.4% a year at $13.27, 11.5% at $16.00, 10.1% at $18.87 and 9.3% at $21.00. Above about $22, the Bull value, a holder would be paying for the best case. ## Dividend The company pays $0.08 a share every month, $0.96 a year, a yield of 5.1% at $18.87. My 2027 cash to shareholders of $1.34 a share covers it 1.40 times, so 71% is paid out; management says distributions took about 65% of MFFO after capital spending this year. The dividend was $1.20 a year before 2020, was suspended during the pandemic and has since been rebuilt to $0.96 a year, with occasional special payments. In my Bear it is barely covered, so a recession would test it again. ## Reasons to own Apple Hospitality - Comparable RevPAR up 7.3% in the third quarter and about 10% in October, with hotel expenses growing half as fast as revenue. - Leverage of about 3 times EBITDA, no significant maturity before 2029 and 210 of 216 hotels unencumbered. - A monthly dividend of $0.96 a year, covered about 1.4 times by cash after capital spending. - Wide diversification: 83 markets, no market above 7% of hotel profit, and half the portfolio with no new upscale or upper midscale hotel under construction within five miles. - Asset sales at a 6.8% cap rate show private buyers value even the weaker hotels at prices close to what the stock implies for the whole portfolio. ## What could go wrong? - A recession. Hotel rooms reprice every night, so a drop in business travel reaches revenue within weeks, as in my Bear. - Costs. Utilities rose 7.1% and repairs 6.5% in the quarter; this year's falling insurance and property tax bills will not repeat every year. - The acquisition push. Management wants to grow just as hotel prices have recovered; buying hotels at 6% to 7% cap rates when shareholders need about 10% would add rooms, not value per share. - Brand dependence. 210 hotels carry Hilton or Marriott flags, and franchise fees rose 12.4% in the first nine months. - Rates. A 10-year Treasury above 5% makes a 5.1% dividend yield less special than it used to be. The options market is calm. Implied volatility on at-the-money options averaged about 25% in October, near the low end of the past year, which suggests a typical one-month move of about 7%, or $1.35, either way. I could not get a reliable read on the price of downside protection relative to upside, so I draw no tail-risk conclusion from it. About 8.1% of the shares were sold short at the latest count, which can make moves sharper in both directions. None of this changes the value. ## Management execution - Guidance was raised after the third quarter, and the company again beat industry RevPAR in its markets. - Buybacks were done at $14.16 on average in 2024 and as low as $11.77 in late 2025, well below today's price and my value. - The balance sheet stayed conservative through the 2025 slowdown, and the July refinancing pushed maturities out to 2029 and beyond. - Per-share cash earnings are about where they were in 2018, after years of buying, selling and renovating hotels. - The 2026 change to add stock pay back to MFFO flatters the headline figure, though prior years were restated openly. On my ten-point management check (two points each), Apple Hospitality scores 14 of 20. ## Stock Analyza scorecard | Business quality | Score | | --- | --- | | Franchise and pricing power | 10/20 | | Return on capital over its cost | 5/20 | | Balance sheet and resilience | 11.25/15 | | Earnings quality | 11.25/15 | | Growth and reinvestment runway | 3.75/15 | | Management and capital allocation | 7.5/10 | | Dilution and governance | 3.75/5 | | Total | 52.5/100 | The valuation score is **42.5 of 100**. | Valuation score | Score | | --- | --- | | Discount to the Base (the price is 0.5% below it) | 25/50 | | Price against the Bear (-30.1%) | 7.5/30 | | What the price assumes (my Base) | 10/20 | | Total | 42.5/100 | Return on capital scores low because hotel income of about $475 million on roughly $6.7 billion of original cost is a 7% return, around the cost of capital. Growth scores low because per-share cash earnings have not grown since 2018. On the sector scorecard for property REITs the company scores 3 of 12 with one criterion unavailable, at most 5, which puts it among standard companies rather than compounders. Business quality and valuation are shown separately and are not averaged. ## Confidence score | Confidence | Score | | --- | --- | | Historical data and sources (SEC filings, complete) | 5/5 | | Accounting and ownership (MFFO change, stock pay, ground leases reconciled) | 3.75/5 | | Evidence for forward assumptions (strong October, no 2027 guidance) | 2.5/5 | | Model construction (two independent recomputations agree) | 3.75/5 | | Independent challenge (asset sales, industry cap rates, building costs, no dated peer set) | 3.75/5 | | Total | 18.75/25, grade B | The grade measures how well the model is identified, not the chance of a loss. ## What I would watch from here The full-year report, expected in late February 2027 (last year's came on February 23), has to show full-year comparable RevPAR growth in the top half of the 5.1% to 6.1% range, 2027 guidance with RevPAR growth of at least 2% and a margin of 35% or more, the five hotel sales closed for about $72 million, and acquisitions priced at a cap rate of 7.5% or better. ### Green - 2027 guidance with comparable RevPAR growth of 3% or more and a hotel margin of 35% or more. - Acquisitions at forward cap rates of 7.5% or higher. - Dividend at no more than 75% of cash after capital spending. ### Yellow - RevPAR growth between 0% and 2%. - Hotel margin between 33% and 35%. - Net debt above 3.5 times EBITDA to fund purchases. ### Red - Comparable RevPAR down 3% or more for two quarters. - Hotel margin below 33%. - Cash after capital spending below the dividend, or new shares issued below my Base. One market signal is worth watching too: if option prices start charging much more for downside protection ahead of the February report, I would read the next guidance more carefully, but it would not change the value on its own. ## The three most important thesis breakers 1. A recession that hits business travel in 2027, which leads toward the Bear. 2. Expense growth above revenue growth, so the margin gains of 2026 reverse even without a recession. 3. An acquisition spree at low cap rates funded with debt or new shares, which adds rooms but not value per share. ## Stress test and independent check I rebuilt the cash flow model, the asset value, the blend and all three scenarios in a second, separately written script, and the results match to the cent. That checks the arithmetic, not the forecasts. | Input | Status | | --- | --- | | Third quarter results, balance sheet, debt, guidance | SEC filing, November 5, 2026, as reported | | Pending sales, cap rates, capital spending share | Earnings call, November 6, 2026 | | MFFO history, year-end prices | Results releases for 2019, 2024 and 2025 | | 2019 year-end price | My calculation from company leverage data | | 2026 hotel revenue without sold hotels | My estimate | | Revenue path, margins, discount rate, cap rate | My assumptions | Quotes for the November 6 close differ by a cent ($18.87 and $18.88); I use $18.87. My conservative choices are a 10% discount rate, zero value from acquisitions and the full stock pay as a cost; my generous one is a margin that holds at 35.3% for five years. The weakest point of the model is the 2027 starting point: the recovery is strong now, and hotel cycles turn faster than most. The strongest bull argument is a business travel recovery with almost no new supply. The strongest bear argument is that the price already assumes that recovery lasts. ## Final verdict: hold at $18.87 Apple Hospitality is a well-run, low-debt owner of ordinary hotels, and ordinary is the point: it reliably turns room nights into monthly dividends. What it has not done is grow cash earnings per share in eight years, and at $18.87 the market is paying for that history as if it were a growth record. The hotels are worth about what the stock says. Nothing more. **Verdict: HOLD at $18.87, watchlist for new money. Base $18.96, 0.5% above the price, Bear $13.19, Bull $22.23, Confidence B (18.75/25). Required margin of safety 30%, maximum buy price $13.27.** New money waits for $13.27 or less, a level the stock saw as recently as early 2026. For an existing holder the original cost is irrelevant; at today's price the shares earn roughly a 10% return if hotel demand simply stays healthy, which is fair pay for the risk and no more. A move above about $22 would mean paying for the Bull case, and that is where I would review trimming. ## More analyses on Patreon This analysis is free. Premium members get every in-depth analysis, the full archive and a vote on which stocks get analyzed next: https://www.patreon.com/stockanalyza ## Sources Primary sources are Apple Hospitality's [third quarter 2026 results](https://www.sec.gov/Archives/edgar/data/1418121/000119312526449868/aple-ex99_1.htm) (SEC filing, November 5, 2026), the [third quarter 2026 earnings call](https://www.fool.com/earnings/call-transcripts/2026/11/06/apple-hospitality-aple-q3-2026-earnings-call-transcript/), and the results releases for [2025](https://www.sec.gov/Archives/edgar/data/1418121/000119312526064006/aple-ex99_1.htm), [2024](https://www.sec.gov/Archives/edgar/data/1418121/000095017025025637/aple-ex99_1.htm) and [2019](https://www.sec.gov/Archives/edgar/data/1418121/000118518520000214/ex_173706.htm). The reference price is $18.87, the November 6, 2026 NYSE close ([Yahoo Finance](https://ca.finance.yahoo.com/quote/APLE/seasonality/), [Tickertape](https://www.tickertape.in/us-stocks/apple-hospitality-reit-inc-APLE-share-price)). The 10-year Treasury yield is from [FRED](https://fred.stlouisfed.org/graph/?g=1S3LS), hotel cap rates from [HVS](https://www.hvs.com/Print/HVS-US-Market-Pulse-August-2026?id=10541), development costs from HVS as reported by [Asian Hospitality](https://www.asianhospitality.com/select-service/), option data from [Options Analysis Suite](https://www.optionsanalysissuite.com/stocks/aple/history) and short interest from [StockAnalysis](https://stockanalysis.com/stocks/aple/statistics/). **Disclaimer.** This analysis is provided solely for research and educational purposes. It is not personalized investment, financial, legal or tax advice. Values are estimates, not forecasts or trading instructions. Apple Hospitality is exposed to the hotel and travel cycle, operating cost inflation, interest rates, dependence on Hilton and Marriott franchises, acquisition decisions, its REIT tax status and valuation risk. Investors can lose part or all of their invested capital. Method: Master Investment Analysis Framework v4.3. Approach: five-year cash flow to shareholders after hotel capital spending, interest and stock pay with a terminal value, and a private-market value of the hotels at a 7.25% cap rate, using the same net debt and share count. Confidence: B/18.75. Data checks: passed with warnings. Open data gaps: dated peer multiples, option skew, closing of the five pending hotel sales.