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Baird Upgrades B-Dubs, But Why?


In a report published Thursday, senior analyst Stephen Anderson of Miller Tabak & Co. upgraded Buffalo Wild Wings (NASDAQ: BWLD) from Hold to Buy. The price target was maintained at $188. The upgrade follows a sharp pullback in the stock.

The company's share price has declined almost 20 percent after the high seen in early February, with most of the decline coming in after the company reported its Q1 earnings. The analysts believe this pullback was driven by concerns regarding comp deceleration and the continuing high wing costs hurting profit expansion.

"However, we contend the combination of mid-single-digit same restaurant sales growth, solid unit expansion, a retreat in food costs led by a drop in average wing costs, and reduced operating costs as a percentage of sales (particularly as BWLD anniversaries the higher initial labor costs associated with the "team captain" initiative) will result in EPS growth above guidance for 2015," the analyst said.

For 2016, the analyst expects the company's comp growth to witness modest acceleration, along with sustained moderation in food costs, potential share buybacks and aggressive franchise development to drive EPS growth of more than 20 percent for Buffalo Wild Wings.

In fact, the analyst expressed his optimism regarding the stock rebounding in the near future.

Latest Ratings for BWLD

Nov 2017DowngradesBuyHold
Nov 2017DowngradesBuyNeutral
Nov 2017DowngradesBuyHold

View More Analyst Ratings for BWLD
View the Latest Analyst Ratings

Posted-In: Miller Tabak & Co.Analyst Color Upgrades Analyst Ratings


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