UPDATE: BMO Capital Markets Initiates Coverage On Buffalo Wild Wings

In a note dated October 9, BMO analyst Andrew Strelzik initiated coverage of Buffalo Wild Wings BWLD with an Outperform rating and a $165 price target.

Strelzik wrote, "We believe there is upside to 2015 expectations and that BWLD will generate 20 percent-plus earnings growth for the foreseeable future."

However, he said the current rise in chicken prices poses a temporary headwind, which he believes will limit EPS growth in the fourth quarter of 2014 as well as in the first quarter of 2015.

Further into 2015, Strelzik said wing prices should fall to $1.20 per pound from $1.73 per pound currently. He also expects Buffalo Wild Wings to capture lower breast prices when its contract expires in March. To the point, he noted a 10 percent decline in wing and breast prices equates to a $0.65-$0.70 EPS contribution.

Strelzik concluded, "we believe there is a modest multiple expansion opportunity from current levels because we believe BWLD is the best way to capitalize on the likely material decline in chicken prices given the company's significant exposure."