UPDATE: J.P. Morgan Downgrades Bloomin' Brands on Mixed Factors

In a report published Tuesday, J.P. Morgan analyst John Ivankoe downgraded the rating on Bloomin' Brands BLMN from Overweight to Neutral, but raised the price target from $22.00 to $25.00.

In the report, J.P. Morgan noted, “Focus is on transition to more systems driven, fact-based decision making, and more efficient cross-brand management driving future growth. These changes allow higher structural risk from high operating and financial leverage to be tolerated, as sales, cost, and FCF are visible, in our view. Improved marketing effectiveness matched with remodels and daypart expansion should drive 2%+ comps, and unit growth opportunity arguably remains despite concept maturity. Modest margin growth can occur based on low-hanging cost savings initiatives at the store level. We believe this fundamental outlook is nearly reflected in the stock's valuation and therefore believe a Neutral rating is now justified.”

Bloomin' Brands closed on Monday at $24.97.