Red Robin Gourmet Burgers (RRGB) PT Raised to $30 at Raymond James

Raymond James analyst Brian Vaccaro raised the price target on Red Robin Gourmet Burgers (NASDAQ: RRGB) to $30.00 (from $26.00) while maintaining an Outperform rating.

The analyst commented, "We reiterate our Outperform rating on RRGB after meeting with management last week at the virtual ICR conference. Exiting the meetings, we have a clearer understanding of cost efficiencies realized during COVID (~$30M) and more comfort that a new management structure will not reduce supervisory hours (thus, less risk to operations). Said savings support management's optimism that post-COVID EBIT margins should be 100 bp above pre-COVID levels assuming a 100% sales recovery, creating potential upside to our '22 estimates). We are also confident in the company's liquidity position with $128M available liquidity and a recent weekly cash burn rate of $1.5M (= 85 weeks). In a post-vaccine environment, we believe AUV's can recapture pre-COVID levels given competitor closures (some estimate 10-15%) and the continued rollout of Donato's (~18% of Co. units currently driving ~5% sales outperformance vs. rest of system). Combined with the stock's depressed valuation (2022 EV/EBITDA ~5x), we see a favorable risk/reward from current levels."

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