Bj's Restaurants, Inc. (BJRI): Cutting Valuation Range - Wells Fargo
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Wells Fargo analyst, Jeff Farmer, reiterated his Market Perform rating on shares of BJ's Restaurants (NASDAQ: BJRI) but cut the valuation range midpoint to $38 from $39 after 3Q16 confirmed fears of a significant slowdown in BJRI’s top-line. The company pointed to modestly improving 4Q-to-date same-store sales (SSS) while reducing its near-term unit growth forecast which the analyst sees as "slight positives from an otherwise underwhelming report".
BJRI posted 3Q16 EPS of $0.30, a penny below our estimate and $0.03 below the Street, on a 3.4% SSS decline (lower mix from lunch, election drag, a difficult CA lap) and 210bps store-level margin contraction.
The valuation range drops to $37-39 from $38-$40 and equates to 7.0-7.5x 2017E EBITDA.
Shares of BJ's Restaurants closed at $35.69 yesterday.
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