Shares of BJ's Restaurants, Inc.
The company’s third quarter EPS of $0.30 was below $0.33 consensus on -3.4 percent same-store sales growth versus -1.9 percent consensus view.
“Given our expectation for muted SSS growth trends and a declining marginal benefit from ongoing cost initiatives, we believe risk to stubbornly high consensus estimates remains,” analyst Nick Setyan wrote in a note.
In addition, Setyan is skeptical of the company’s said same-store sale drivers including “value deals, targeted loyalty offerings, select promotional days, continued digital and mobile app adoption, and higher advertising spend.”
The analyst, who has a Neutral rating on the stock, favors curtailing medium-term unit growth to focus on margins and cash flows and not expecting cost initiatives to boost margins without an improvement in same-store sales trends.
Accordingly, Setyan cut his 2016 EPS estimate to $1.72 from $1.74 and 2017 EPS estimate to $1.94 from $2.07. The analyst also cut his price target on the stock by $6 to $34.
At time of writing, shares of BJ's Restaurants fell 5.30 percent to $33.80.
|Oct 2016||Morgan Stanley||Maintains||Equal-Weight|
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