Is Bojangles A Buy After Earnings?
Wells Fargo: Same-Store Sales Impressive
Jeff Farmer of Wells Fargo commented in a note that Bojangles' same-store sales gains of 7.9 percent were impressive despite being pre-released in early May.
However, Farmer noted that despite the "modestly" better-than-expected profit flow-through on the same-store sales and "strong" fundamental momentum, shares are trading at a 15.9x 2016 estimated EBITDA, a 21 percent premium to the mean valuation of its closest peers.
Farmer also stated that the company's lack of second quarter same-store sales guidance should be viewed as a "minor disappointment."
On the other hand, the company disclosed that eggs represent only 2 percent of its commodity basket and cost pressures (due to Avian flu concerns) are expected to continue being "manageable." The analyst added that he is modeling the company's full year COGS to be 33.8 percent (110 basis points higher year over year), but did admit the estimate could prove conservative.
Shares remain Market Perform rated with an unchanged valuation range of $25 to $27.
Piper Jaffray: Look Elsewhere For Better Growth
Nicole Miller Regan of Piper Jaffray commented in a note that Bojangles' inaugural earnings report as a public company was "solid," and numbers were generally in-line with expectations.
Looking forward, Miller Regan commented that a steady 15 percent earnings per share growth is achievable given the company's "culture of operational excellence." However, the analyst stated that from the stock's perspective more upside exists elsewhere within her coverage.
Shares remain Neutral rated with a $27 price target, which is based on a 12x fiscal 2016E EBITDA multiple of the core business in addition to $10 per share in new unit pipeline value.
Latest Ratings for BOJA
|Sep 2016||Craig-Hallum||Initiates Coverage on||Strong Buy|
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