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UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Lowers PT on BJ's Restaurants

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In a report published Monday, BMO Capital Markets reiterated its Market Perform rating on BJ's Restaurants (NASDAQ: BJRI), but lowered its price target from $47.00 to $37.00.

BMO Capital noted, “BJ's reported 3Q EPS of $0.24, ~flat year over year (ex-items). The result missed the $0.28 Street estimate by $0.04 (~14%). Comps were sluggish, up just 2.3% (~130 bp below the consensus view) despite a 3.4% menu price increase in place in the quarter owing to a 1.1% decline in traffic. As a result, restaurant-level operating margin de-levered 190 bp to 12.4% (~160 bp below our forecast; see details in Exhibit 2). Sales driving initiatives implemented in the quarter (rollout of the Loyalty program, a new menu, and the hourly Beer Master education program) added ~50 bp of margin pressure. Nevertheless, the weak traffic trends, margin compression, and EPS deceleration experienced in the quarter are concerning.”

BJ's Restaurants closed on Friday at $32.27.

Latest Ratings for BJRI

Oct 2016WedbushMaintainsNeutral
Oct 2016BarclaysMaintainsUnderweight
Oct 2016Morgan StanleyMaintainsEqual-Weight

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