In a report published Friday, KeyBanc Capital Markets analyst Christopher O'Cull reiterated a Buy rating on Red Robin Gourmet Burgers RRGB, and raised the price target from $65.00 to $68.00.
In the report, KeyBanc Capital Markets noted, “We reiterate our BUY rating of Red Robin Gourmet (RRGB-NASDAQ) after the Company reported better than expected SRS (4.3% vs. Street/KBCM 2.6%) and EPS ($0.77 vs. Street $0.66/KBCM $0.68) for the 2Q. We continue to recommend shares for the following reasons: 1) EPS upside potential (2014 KBCM $2.70/Street $2.58) driven by sales-building plan and system upgrades designed to eliminate store-level waste; and 2) accelerating sales (8-10% next five years vs. 5% CAGR past five years) and EPS growth (15-20% next five years vs. 0% CAGR past five years) driven by SRS gains (2-4%), unit development (6-8%) and tight cost controls. Currently, shares are trading at 7.5x NTM EBITDA (CDR segment average 9.2x), 23x NTM EPS (segment 25x) and 0.8x EV/sales (segment 1.1x).”
Red Robin Gourmet Burgers closed on Thursday at $61.47.
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