Market Overview

Bloomin Brands Performance Will Be Supported By Outback, Morgan Stanley Says

Share:
Bloomin Brands Performance Will Be Supported By Outback, Morgan Stanley Says
Related BLMN
71 Biggest Movers From Yesterday
52 Stocks Moving In Thursday's Mid-Day Session
Bloomin' Brands Gets Relative Strength Rating Upgrade (Investor's Business Daily)

Although Bloomin' Brands Inc (NASDAQ: BLMN) has achieved improved revenue growth in 2018, shares have lagged and its stock valuation is at the lower end of its casual dining peers, according to Morgan Stanley.

The Analyst

Morgan Stanley’s John Glass upgraded Bloomin Brands from Underweight to Equal-Weight, while keeping the price target at $19.

The Thesis

Shares of Bloomin Brands have declined 14 percent year-to-date, while the casual dining peer set has gained 12 percent. This has widened the valuation gap versus peers. Glass said the company’s stock has been under pressure, despite a significant improvement in sales during 2018.

Sales have been supported by the performance at Outback Steakhouse, where same-store sales have been higher than the industry average for the past seven quarters. Management expects sales trends to remain strong, given structural improvements in quality, service and marketing. Expanded delivery and remodels could also boost sales going ahead.

Support from such initiatives and industry tailwinds could propel Bloomin Brands’ sales in the first half of 2019, Glass said.

Bloomin Brands’ operating margins continue to be below peers, and the analyst said this represents an opportunity for expansion in 2019, despite continued labor inflation headwind.

Price Action

Shares of Bloomin Brands closed Tuesday at $18.08, up 3.6 percent.

Related Links:

Argus: Darden Restaurants Among 'Best-Managed' Dining Names

Casual Dining Stocks Struggle To Cook Up More Foot Traffic

Public domain photo via Wikimedia. 

Latest Ratings for BLMN

DateFirmActionFromTo
Feb 2019William BlairUpgradesMarket PerformOutperform
Feb 2019Bank of AmericaDowngradesUnderperformNeutral
Jan 2019JP MorganUpgradesNeutralOverweight

View More Analyst Ratings for BLMN
View the Latest Analyst Ratings

Posted-In: John Glass Morgan StanleyAnalyst Color Upgrades Restaurants Analyst Ratings General Best of Benzinga

 

Related Articles (BLMN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DOBarclaysUpgrades0.0
OIIBarclaysUpgrades0.0
RIGBarclaysUpgrades0.0
CTLRBC CapitalDowngrades0.0
ECLJP MorganDowngrades167.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Alkermes Catches A 'Sell' Downgrade On Depression Therapy, M&A Prospects

Benzinga's Top Upgrades, Downgrades For December 19, 2018