Jefferies Lowers RUTH EPS, Raises PT To $6
January 18, 2011 9:35 AM
Jefferies met with Ruth's Hospitality Group (NASDAQ: RUTH) management at the ICR conference and came away more confident in RUTH's longer-term outlook & the recovery in higher-income consumer/special occasion spending, “but our heightened concern about food cost inflation in '11 pushes potential EPS upside to '12.”
Jefferies said that its EPS for '11/'12 is reduced to $0.32/$0.39, and that its PT moves to $6.00 from $5.25.
“While the competitive environment remains difficult in the high-end steak segment, we think RUTH's management has successfully implemented several key initiatives, and that investors willing to wait for sustained positive comps could see meaningful longer-term upside as margins recover,” Jefferies writes.
Ruth's Hospitality closed Friday at $5.25.
