UPDATE: Credit Suisse Upgrades Bloomin' Brands (BLMN) to Outperform
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Credit Suisse analyst Lauren Siberman upgraded Bloomin' Brands (NASDAQ: BLMN) from Neutral to Outperform with a price target of $33.00 (from $32.00).
The analyst comments "We see an attractive risk/reward with shares trading near trough valuation (~9x/6x consensus FY22 EPS/EBITDA vs 13-13.5x/7x pre-COVID average), and given BLMN’s meaningfully improved business model (better sales, better margins, reducing leverage) & earnings potential. We are optimistic in BLMN’s ability to maintain elevated sales, noting the company has recovered 90%+ of in-restaurant sales & is retaining 60-70% of off-premise, and there is still capacity as traffic remains below these levels. While we recognize inflation concerns, we note BLMN delivered 2Q margin upside (likely could have been ~100bps higher on full Brazil recovery) & increased its LT operating margin to 8% (from 7.5%) in an environment where peers are cautioning cost pressures & margin downside. Near-term, we believe the 3Q21 guide could be conservative, with BLMN embedding 3QTD US AWS of ~$71K decline to $69K based on the resumption of traditional seasonality, and an implied operating margin of 7.5% (1Q 9.2%, 2Q 11%). Over the medium to long-term, we expect BLMN to increase efforts to accelerate unit growth, and together with deleveraging of the balance sheet (targeting 3x net debt to adj. EBITDAR), should support multiple expansion."
Shares of Bloomin' Brands closed at $25.46 yesterday.
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