Conclusion To B-Dubs' Activist Investor Drama Leaves Some With More Questions Than Answers

Another analyst is left puzzled and waiting after Buffalo Wild Wings (NASDAQ: BWLD)’s lost proxy war with activist investor Marcato Capital Management in early June.

Stephen’s Will Slabaugh downgraded shares of Buffalo Wild Wings from Overweight to Equal Weight and reduced its price target significantly from $195 to $145.

The stock is down 17 percent this year; 14.5 percent since the annual shareholder meeting on June 2 where Marcato succeeded in getting three of its four nominated board members elected and CEO Sally Smith announced her resignation.

Details Needed

“We believe that the proxy fight and subsequent management shake-up has instilled more questions than answers,” said Slabaugh in a note.

What Slabuagh is most concerned over is simply the lack of information the company has provided regarding its new direction.

One of Marcato’s primary objectives was to launch a refranchising strategy, among other structural changes and cost cutting measures. Besides fuller details on how these moves will pan out, the analyst needs to see an achievable timeline put in place before a more bullish stance can be justified.

Slabaugh does note though, that B-Dubs continues to be one of Stephens’ favorite casual dining companies in the long-term.

The analyst reduced his fiscal 2017 and 2018 adjusted EPS estimates from $5.65 to $4.75 and from $6.20 to $5.50 respectively, a result of significantly lower comps estimates.

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