BJ's Restaurants' Model May Make It Vulnerable To Recession - BJ's Restaurants (NASDAQ:BJRI)

Stifel downgraded

BJ's Restaurants, Inc.BJRI

to Sell from Buy, and lowered its price target to $35 from $52. According to the report published Tuesday, the rating change was driven by the analysts' view that the U.S. economy will probably fall into recession within the next three to nine months.

The analysts stated they are confident in the company's brand positioning within the polished-casual dining segment, but cautious about the stock performance ahead of expected recession in light of the following aspects of the company:

"100 percent company-owned business model (higher relative cyclicality versus franchise models)"
"Casual-dining category (more cyclical occasion and higher guest check (vs. quick-service-restaurants))"
"Significant exposure to pending minimum wage/overtime regs (w/ 37 percent of BJRI stores located in NY/CA)"
"Relatively low share volume"

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