Miller Tabak Downgrades Buffalo Wild Wings, Offers Alternative Ideas

Stephen Anderson of Miller Tabak & Co. on Monday downgraded shares of Buffalo Wild Wings BWLD to Hold from Buy after shares reached his $193 price target after a post-earnings rally last Friday. "We still think the combination of mid-single-digit same-restaurant sales growth, solid unit expansion both in the U.S. and overseas, a more constructive outlook for food costs, modest upside from Bufflo Wild Wings' emerging brands (PizzaRev and Rusty Taco), and the potential addition of share buybacks, will sustain earnings per share growth in the low 20 percent range," Anderson wrote. Despite the growth profile, the analyst believes that it is already reflected in current valuation, implying limited near-term upside in share prices. Instead, Anderson recommends investors seek exposure to casual dining names with lower commodity costs such as The Cheesecake Factory CAKE and Red Robin Gourmet Burgers. RRGB The analyst notes that both of these companies outperformed the benchmark same-restaurant sales averages for much of the past two years.