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Braemar Hotels & Resorts, Inc. (NYSE:BHR), which is in the reits business, and is based in United States, saw significant share price movement during recent months on the NYSE, rising to highs of $13.94 and falling to the lows of $10.05. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Braemar Hotels & Resorts’s current trading price of $10.05 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’s the opportunity in Braemar Hotels & Resorts?
Great news for investors – Braemar Hotels & Resorts is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $16.75, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Braemar Hotels & Resorts’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Braemar Hotels & Resorts look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 adverse prospect of negative growth brings about some degree of 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.