Update (9:36 a.m.): Updated with Monday market open information.
NEW YORK (TheStreet) -- Barclays decreased its price target on Bloomin' Brands (BLMN - Get Report) to $30 and set an "overweight" rating. The firm cited outsized cost pressure as the reason for the move.
The stock was up 0.55% to $21 at 9:35 a.m. on Monday.
TheStreet Ratings team rates BLOOMIN' BRANDS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLOOMIN' BRANDS INC (BLMN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BLMN's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, BLOOMIN' BRANDS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- BLOOMIN' BRANDS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BLOOMIN' BRANDS INC increased its bottom line by earning $1.63 versus $0.40 in the prior year. For the next year, the market is expecting a contraction of 25.1% in earnings ($1.22 versus $1.63).
- The gross profit margin for BLOOMIN' BRANDS INC is rather low; currently it is at 15.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.61% trails that of the industry average.
- The debt-to-equity ratio is very high at 2.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.36, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: BLMN Ratings Report