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Strength Seen in Braemar Hotels & Resorts (BHR): Can Its 5.3% Jump Turn into More Strength?

Braemar Hotels & Resorts BHR shares rallied 5.3% in the last trading session to close at $6.90. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 1.8% gain over the past four weeks.

The uptick is attributable to the overall optimism surrounding the encouraging recovery in leisure demand in the company’s markets. This is also expected to have supported its first-quarter results, which are slated to release tomorrow, after market close.

In fact, on Apr 22, Braemar Hotels announced preliminary results for the March-end quarter. The company expects to report adjusted EBITDA of $16.1-$17.1 million. Moreover, it achieved positive corporate-level cash flow earlier than expected. Management believes that the results were driven by robust leisure demand at its luxury properties.

Price and Consensus

Price Consensus Chart for BHR
Price Consensus Chart for BHR

This hotel owner is expected to post quarterly funds from operations (FFO)
of $0.14 per share in its upcoming report, which represents a year-over-year change of +16.7%. Revenues are expected to be $72.88 million, down 38% from the year-ago quarter.

FFO and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in FFO estimate revisions are strongly correlated with near-term stock price movements.

For Braemar Hotels & Resorts, the consensus FFO estimate for the quarter has been revised 142.9% higher over the last 30 days to the current level. And a positive trend in FFO estimate revision usually translates into price appreciation. So, make sure to keep an eye on BHR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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