Stock Spotlight: Braemar Hotels & Resorts Inc. (NYSE: BHR) – Luxury Real Estate at Deep Value
Braemar Hotels & Resorts Inc. (NYSE: BHR) is a real estate investment trust (REIT) that owns a portfolio of luxury hotels and resorts concentrated in premier markets such as Aspen, Beverly Hills, San Diego, and Key West. Unlike budget or business travel REITs, Braemar focuses exclusively on the high-end leisure and business traveler, where pricing power and branding carry long-term advantages.
With a post-pandemic travel recovery underway and rising rates of luxury spending, Braemar stands out as a high-beta, high-potential turnaround story trading at a steep discount to its underlying asset value.
The Bigger Picture: Braemar’s Strategic Role
Braemar’s strategy is to own and operate irreplaceable hotel assets in top-tier travel destinations, often branded under premium flags such as Marriott’s Autograph Collection, Ritz-Carlton, and Curio by Hilton.
Key characteristics include:
- 100% focus on luxury segment
- High average daily rate (ADR) and revenue per available room (RevPAR)
- Lean property count with outsized cash generation potential
Braemar’s smaller portfolio allows for active asset management and targeted reinvestment in properties with pricing power and upside through renovations or repositioning.
Key Catalysts Driving Braemar’s Momentum
- Luxury Travel Resilience: High-income consumers continue to travel and spend, even in inflationary environments—supporting occupancy and rate strength.
- Portfolio Optimization: Asset sales and refinancing have helped reduce debt costs and reposition the balance sheet post-COVID.
- Undervalued Relative to NAV: BHR trades at a steep discount to net asset value, with many properties independently valued far above their carrying price.
- Positive Operating Metrics: Recent quarters show rising RevPAR, occupancy, and cash flow, driven by leisure demand and group travel returning.
- Insider Ownership & Share Buybacks: Management owns a significant stake and has initiated buybacks to capitalize on the undervaluation.
Technical Analysis: Braemar’s Bullish Setup
- Moving Averages: BHR is pushing above its 50-day moving average and approaching its 200-day—setting up a potential golden crossover.
- MACD: Bullish crossover forming, with positive histogram momentum building on the daily chart.
- RSI: RSI at 55 suggests strengthening trend with headroom before overbought levels.
- Chart Structure: A long base has formed between $2.50 and $3.00—clearing $3.20 on volume could trigger a breakout toward the $4.00–$4.50 range.
- Volume Trends: Recent accumulation on green days signals early institutional interest.
Potential Risks to Consider
- High Leverage: BHR carries significant debt, common among hotel REITs, which increases sensitivity to interest rates and refinancing risks.
- Cyclicality: The hospitality industry is inherently cyclical—economic downturns can hurt occupancy and average rates.
- Small-Cap Volatility: With a relatively low market cap and liquidity, BHR may experience large price swings on news or sentiment shifts.
Braemar Hotels & Resorts offers a rare mix of deep value, high-end real estate exposure, and technical turnaround potential. For investors looking to play the recovery in luxury travel and benefit from a discount-to-assets setup, BHR could be a sleeper REIT to watch in 2025. 🏨📉📈