On Monday, B.Riley maintained a Neutral rating on Braemar Hotels & Resorts Inc. (NYSE: NYSE:BHR), adjusting the stock's price target down to $2.50 from the previous $3.00. The adjustment follows the company's fourth-quarter earnings report for 2023, which revealed an adjusted EBITDA of $37.4 million.
This figure surpassed B.Riley's estimate of $35.7 million, yet fell short of the consensus estimate of $38.2 million.
The firm noted a year-over-year decline in revenue per available room (RevPAR) for Braemar's luxury and upscale leisure hotels, which dropped by 8.5%. Despite this decrease, which came after a period of challenging comparisons, there is an expectation for continued softness in leisure RevPAR. Still, this may be partially balanced by growth in urban RevPAR, though EBITDA growth is anticipated to remain weak.
B.Riley's analysis suggests that Braemar Hotels & Resorts is likely to demonstrate its asset value through the sale of one or two properties, which would enable the company to reduce its debt. The new stock price target of $2.50 is based on a multiple of 10.25 times the forward twelve-month EBITDA.
The firm has revised its estimates upward but has lowered the price target to account for factors including interest expense, preferred dividends, and capital expenditure challenges.
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