Braemar Hotels & Resorts Inc (NYSE:BHR), which is in the reits business, and is based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $11.95 and falling to the lows of $10.01. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Braemar Hotels & Resorts’s current trading price of $10.54 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Braemar Hotels & Resorts’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Braemar Hotels & Resorts worth?Good news, investors! Braemar Hotels & Resorts is still a bargain right now. According to my valuation, the intrinsic value for the stock is $19.31, but it is currently trading at US$10.54 on the share market, meaning that there is still an opportunity to buy now. Braemar Hotels & Resorts’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Braemar Hotels & Resorts look like?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Braemar Hotels & Resorts, at least in the near future.
What this means for you:
Are you a shareholder? Although BHR is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to BHR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on BHR for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Braemar Hotels & Resorts. You can find everything you need to know about Braemar Hotels & Resorts in the latest infographic research report. If you are no longer interested in Braemar Hotels & Resorts, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.