Morgan Stanley Downgrades Black Rock Coffee Bar (BRCB) to Equalweight
Morgan Stanley analyst Brian Harbour downgraded Black Rock Coffee Bar (NASDAQ: BRCB) from Overweight to Equalweight with a price target of $9.00 (from $22.00).
The analyst comments "Downgrading BRCB to EW: Looking at the numbers there remains a disconnect between BRCB's growth profile and valuation, but we're aware that narrative, execution, and qualitative concerns can sometimes override that. For a newly public young company in a large competitive category (especially right now), hitting guidance isn't enough – upside to most KPIs is often key to showing the durability of a growth concept and drawing investor interest. Comps have been good for BRCB and margins already strong, but we'd like to see new store performance break out (this happened for BROS a few years after IPO) and greater consistency with openings. We are not modeling a miss in 2Q specifically, or cutting numbers, but we use a lower multiple for now, with upside skew to our $9 PT. Rebuilding investor confidence could push this multiple back higher over time."
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Shares of Black Rock Coffee Bar closed at $8.03 yesterday.