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Buffalo Wild Wings Uncertainty, Execution Challenges Keep Deutsche Neutral On Shares

Buffalo Wild Wings Uncertainty, Execution Challenges Keep Deutsche Neutral On Shares - Buffalo Wild Wings, Inc. NASDAQ:BWLD

Deutsche Bank prefers to remain on the sidelines on Buffalo Wild Wings BWLD on macro uncertainty and ongoing execution challenges, despite the company increased capital returns, announced initiatives to drive a sales rebound and restaurant-margins at its analyst day.

The restaurant operator increased its leverage target to 1.5x (to be completed by the fourth quarter) with the proceeds allocated to share repurchases — $300 million increase, with $375 million now remaining under authorization).

In addition, the company indicated it could implement its first dividend in 2017 and provided a qualitative plan to structurally enhance its restaurant margin profile to 20 percent.

Related Link: Marcato Pounds The Table On Buffalo Wild Wings, Calls For 5 Drastic Changes

"We believe BWLD understands the need to improve its offerings (food quality, menu, day part mix), drive labor productivity and advance its technology, among other initiatives, but we are still unclear on when (and to what degree) these strategies will re-accelerate results," analyst Brett Levy wrote in a note.

Rating And Justification

Levy, who has a Hold rating on the stock, said a willingness to maintain a balanced company and franchised ownership mix could limit future buybacks.

The company also spent time discussing its international and emerging growth, which the analyst view as unlikely to contribute to profits for the next few years.

However, Levy raised his price target by $10 to $155, while the shares rose 2.47 percent to $165.31 at time of writing.

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DateFirmActionFromTo
Aug 2016BMO CapitalMaintainsOutperform
Aug 2016Deutsche BankMaintainsHold
Aug 2016Raymond JamesDowngradesOutperformMarket Perform

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