In a note dated October 9, BMO analyst Andrew Strelzik initiated coverage of Bloomin' Brands Inc BLMN with an Outperform rating and a $23 price target.
Strelzik commented,"We believe Bloomin' Brands should not only exceed expectations in 4Q14 and 2015, but also re-accelerate its growth toward its long-term growth algorithm."
For 2015, Strelzik sees the company benefiting from domestic same-store sales growth near 2 percent, 4 percent unit growth, and 40-50 bps margin expansion. Strelzik also believes the company will be able to manage commodity price inflation, i.e. rising beef prices, reasonably well.
Moving forward, Strelzik says the company could be in the position to begin to return $100 million annually to shareholders.
Strelzik concluded, "We believe BLMN should trade at a premium to its mature peers owing to its stronger growth profile and the likelihood it will begin returning cash to shareholders."
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