In a report released on May 8, Michael Bellisario from Robert W. Baird maintained a Hold rating on Braemar Hotels & Resorts (BHR – Research Report), with a price target of $3.00.
Michael Bellisario’s rating is based on a thorough analysis of various facets of Braemar Hotels & Resorts, including recent earnings performance and strategic initiatives aimed at shareholder value creation. The company’s first-quarter earnings for 2024 surpassed expectations primarily due to stronger resort operations, which contributed positively to both revenue and profit margins. Moreover, Braemar’s implementation of a plan to enhance shareholder value—characterized by asset sales, debt repayment, and stock repurchases—is seen as a move towards narrowing the valuation gap with private market values.
However, despite these positive elements, Bellisario holds reservations particularly regarding the company’s approach to repurchasing common stock, given the absence of a low-leveraged balance sheet. Additionally, uncertainties surrounding a proxy fight with Blackwells Capital and the postponement of the annual meeting contribute to a cautious outlook. Hence, the Hold rating reflects a balance between the favorable earnings beat and the strategic plan’s potential upside, against the backdrop of operational and governance-related concerns that may affect the stock’s future performance.
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Braemar Hotels & Resorts (BHR) Company Description:
Braemar Hotels & Resorts, Inc. operates as a real estate investment trust which engages in investing services primarily in high RevPAR, luxury, upper-upscale and upscale hotels. Its hotel properties include Hilton La Jolla Torrey Pines, Capital Hilton in Washington DC, Marriott Plano Legacy Town Center, Seattle Marriott Waterfront, Courtyard San Francisco Downtown, Courtyard Seattle Downtown, Courtyard Philadelphia Downtown, and Renaissance Tampa International Plaza. The company was founded By Montgomery Jack Bennett on April 2013 and is headquartered in Dallas, TX.
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