On Thursday, B.Riley updated its outlook on Braemar Hotels & Resorts Inc. (NYSE: BHR), raising the price target to $3.50 from the previous $2.50 while keeping a Neutral stance on the stock. The firm's analyst pointed to the company's first-quarter performance in 2024 and strategic maneuvers as reasons for the adjustment, though expressing caution due to the uncertainties surrounding the company's future plans.
The analyst noted appreciation for the company's recent actions and the positive impact on the price target, which now stands at $3.50. The valuation is based on a multiple of 10.25 times the firm's estimate of the last twelve months' EBITDA as of the second quarter of 2025. This multiple remains unchanged despite the revised target.
The report also referenced a historical precedent, mentioning Hersha Hospitality (NYSE:HT)'s acquisition by KSL in 2023, as an example of a similar-sized lodging REIT undergoing significant changes. While acknowledging the success reflected in the increased price target, the analyst maintained a cautious outlook due to the potential risks involved in Braemar Hotels' strategy.
B.Riley's analyst expressed interest in seeing how Braemar Hotels' valuation would evolve following further details on additional asset sales and the execution of stock buybacks. However, due to the "material uncertainty" related to the timing and pricing of these initiatives, the Neutral rating was reaffirmed.
The update follows Braemar Hotels & Resorts Inc.'s first-quarter results in 2024, which have evidently contributed to the analyst's decision to raise the price target. The company's future actions, including asset sales and buybacks, are expected to be closely monitored by the market as they unfold.
InvestingPro Insights
As B.Riley updates its outlook on Braemar Hotels & Resorts Inc. (NYSE: BHR), it's important to consider the company's current financial metrics and market performance. According to real-time data from InvestingPro, Braemar Hotels & Resorts Inc. has a market capitalization of $207.64 million, with a negative P/E ratio of -2.57, reflecting the challenges the company faces in achieving profitability. Despite this, the company maintains a high dividend yield of 7.09%, which could be attractive to income-focused investors.
InvestingPro Tips suggest that Braemar Hotels & Resorts Inc. is trading at a low EBITDA valuation multiple and pays a significant dividend to shareholders. These aspects may be particularly relevant for investors seeking potential value plays with income-generating properties. Additionally, the stock has experienced a large price uptick over the last six months, with a 31.05% total return, indicating a positive short-term trend in investor sentiment.
For investors looking for more insights, there are additional InvestingPro Tips available for Braemar Hotels & Resorts Inc. at https://www.investing.com/pro/BHR. By using the coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable analysis and metrics that could guide investment decisions.
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