Market Overview

Can Private Equity Interest Revitalize Buffalo Wild Wings?

Share:
Can Private Equity Interest Revitalize Buffalo Wild Wings?
Related BWLD
The Week Ahead: Big Tech Earnings, Fed Rate Decision Likely To Dominate Headlines
The 'Bomb Cyclone' Portfolio: Winners And Losers

Buffalo Wild Wings (NASDAQ: BWLD) received a takeout offer of around $150 per share from private equity group Roark Capital. The offer would give some investors who bought the stock ahead of the third quarter earnings report a hefty return but would leave some longer-term shareholders with a loss, as the stock briefly traded north of $200 per share in 2015.

The Analyst

Stephens' Will Slabaugh maintains an Equal-Weight rating on Buffalo Wild Wings' stock with an unchanged $115 price target.

The Thesis

Roark Capital's assets in the restaurant sector focuses on franchise-based companies, including Arby's, Auntie Anne's Pretzels and perhaps most notably, a former stake in Wingstop Inc (NASDAQ: WING), Slabaugh said in a Monday note. (See Slabaugh's track record here.) 

The private equity firm is a "prime candidate" that could boost Buffalo Wild Wings' business, including improving the overall experience, menu quality and value, the analyst said. 

An offer over $150 per share represents a 28 percent premium from Monday's closing price and a 9.5x multiple on the analyst's fiscal 2018 EBITDA estimate.

Stephens' prior Equal-Weight rating was based on the assumption that Buffalo Wild Wings as a stand-alone company would continue to show top-line weakness, declining perception among consumers and a decrease in everyday value offers, Slabaugh said. 

Price Action

Shares of Buffalo Wild Wings soared higher by more than 26 percent to trade at $148.80, just shy of the takeout offer.

Related Links:

6 Analysts' First Impressions Of B-Dubs' Q3

Can New Promotions Rescue Buffalo Wild Wings?

Photo courtesy of Buffalo Wild Wings. 

Latest Ratings for BWLD

DateFirmActionFromTo
Nov 2017Maxim GroupDowngradesBuyHold
Nov 2017UBSDowngradesBuyNeutral
Nov 2017Deutsche BankDowngradesBuyHold

View More Analyst Ratings for BWLD
View the Latest Analyst Ratings

Posted-In: Casual Fast Food restaurant chains restaurantsAnalyst Color Reiteration Restaurants Analyst Ratings General Best of Benzinga

 

Related Articles (BWLD + WING)

View Comments and Join the Discussion!