Raymond James Upgrades Bloomin' Brands Ahead Of Q2 Print - Bloomin Brands (NASDAQ:BLMN)

Bloomin' Brands BLMN picked up a sell-side bull Tuesday ahead of its July 30 second-quarter earnings report.

The Analyst

Raymond James analyst Brian Vaccaro upgraded Bloomin' Brands from Market Perform to Outperform and set a 12-month price target of $25.

The Thesis

Raymond James forecast that Bloomin' Brands will report a Q2 EPS of 29 cents, a penny below the consensus.

Vaccaro expects flat revenue of $1.036 billion as soft sales in Brazil offset a U.S. comp gain of 2.4 percent. (See the analyst's track record here.)

An upgrade of Outback Steakhouse's parent company is justified, as low expectations are priced in after a 20-percent plunge in share price since May, the analyst said.

Investors were negative on Bloomin' Brands largely due to slow sales in Brazil, Vaccaro said. Strong U.S. Outback Steakhouse comps will create an attractive entry point, he said.

The stock decline created an attractive risk-reward, as the company is trading at a discount valuation to its peers, in Raymond James' view.

The firm's $25 price target implies a 16.9 price-to-earnings multiple and 8 times the stock's EV/EBITDA. This multiple represents a slight discount to Bloomin' Brands' mature casual dining group peers, Vaccaro said.

The Price Action

Bloomin' Brands shares were up 0.34 percent at $20.78 at the close Tuesday.