Market Overview

UPDATE: Bank of America Upgrades Red Robin Gourmet Burgers as Premium Valuation is Warranted

Related RRGB
Red Robin CEO Weighs In On Q2 Earnings
Red Robin Q2 Sales Miss Expectations, Shares Drop
Starbucks Appoints Former Adobe Executive as First Ever CTO (Zacks)

In a report published Monday, Bank of America analyst Joseph T. Buckley upgraded the rating on Red Robin Gourmet Burgers (NASDAQ: RRGB) from Underperform to Buy, and reiterated the $80.00 price target.

In the report, Bank of America noted, “We are upgrading our rating on RRGB shares from Underperform to Buy and are maintaining our $80 price objective. RRGB shares have corrected significantly after a strong 3Q earnings report (with company-operated same store sales up 5.7%) and are trading at a 20%-25% premium to casual dining peers on a P/E basis but at a 5% discount on an EV/EBITDA basis. In our opinion, the latter is the more relevant valuation metric given aggressive depreciation policies at Red Robin. Our price objective reflects an expected P/E of 28x (a 45% premium to the peers) and an EV/EBITDA valuation of 10x or about a 10%-15% premium to the group. We believe that RRGB's performance and prospects warrant a premium valuation.”

Red Robin Gourmet Burgers closed on Friday at $66.60.

Latest Ratings for RRGB

Jul 2015BTIG ResearchInitiates Coverage onNeutral
Mar 2015Longbow ResearchUpgradesNeutralBuy
Feb 2015JefferiesMaintainsBuy

View More Analyst Ratings for RRGB
View the Latest Analyst Ratings

Posted-In: Bank of America Joseph T. BuckleyAnalyst Color Upgrades Analyst Ratings


Related Articles (RRGB)

View Comments and Join the Discussion!

Get Benzinga's Newsletters