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Stephens: BJ's Restaurants Soars On Strong Comps Even As The Sector 'Wobbles'

Stephens: BJ's Restaurants Soars On Strong Comps Even As The Sector 'Wobbles'

BJ’s Restaurants, Inc. (NASDAQ: BJRI) shares jumped Friday after the chain restaurant's fourth-quarter earnings beat that included a 1.6-percent rise in comps. 

The Analyst 

Stephens analyst Wil Slabaugh reiterated an Overweight rating on BJ's Restaurants and raised price target from $40 to $45.

The Thesis

New initiatives at BJ’s Restaurants continue to drive sales, the analyst said in a Friday note. Same-store sales posted positive growth in every week except one in Q4, he said. 

BJ's quarter-to-date comp figure accelerated to 3.5 percent while the overall industry softened, which is indicative of BJ’s initiatives and message continuing to resonate with the consumer.

“We are encouraged with the momentum of current initiatives, including expanded Brewhouse Specials, the Slow Roast, menu, server handhelds and carryout/delivery and believe this — along with the QTD acceleration to 3.5-percent SSS growth — is evidence that its initiatives are working to produce outsized traffic and check growth even as the industry wobbles to start the year,” Slabaugh said.

Stephens expects trends to continue into positive territory in the upcoming quarters, when Slabaugh said he projects unit growth to accelerate in fiscal 2019 and valuation expansion to follow thereafter.

BJ’s focus on driving an everyday value message of quality at an attractive price through its expanded specials is gaining mind share with consumers, Slabaugh said. 

When asked about the debate in the casual dining sector over food delivery, BJ's CEO Greg Trojan said he does not view delivery as having an impact on dine-in frequency. Although questions still remain regarding delivery's viability at a full-service restaurant, Slabaugh said the company and other competitors are using delivery to drive additional sales in the future.

Price Action

BJ's Restaurants shares were up 12.79 percent at $43.65 at the close Friday. 

Related Links:

Morgan Stanley, Stephens Optimistic On Wingstop Despite Questionable 2018 Guidance

Are Restaurants Safe From The Amazon Effect? 

Latest Ratings for BJRI

Apr 2021Morgan StanleyMaintainsEqual-Weight
Mar 2021Morgan StanleyMaintainsEqual-Weight
Feb 2021Deutsche BankMaintainsHold

View More Analyst Ratings for BJRI
View the Latest Analyst Ratings


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