Buffalo Wild Wings (BWLD) Stock Gains on KeyBanc Upgrade
NEW YORK (TheStreet) -- Buffalo Wild Wings (BWLD) stock is up by 1% to $154 in pre-market trading on Monday morning, after a rating upgrade to "overweight" from "sector weight" at KeyBanc Capital Markets this morning.
KeyBanc established a $175 price target on the stock.
The restaurant owner has the potential for 1,700 domestic spaces and to increase its average unit volume to $3.8 million from roughly $3.3 million, the firm said in a note.
This implies average annual SRS, simple random sample, growth around 3% by building the Buffalo Wild Wings brand, KeyBanc adds.
The stock's present valuation indicates "cautious investor sentiment" toward near-term earnings per share, while discounting long-term sales and cash flow growth potential, according to the firm.
Separately, TheStreet Ratings team rates BUFFALO WILD WINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate BUFFALO WILD WINGS INC (BWLD) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 22.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $66.01 million or 48.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.72%.
- BUFFALO WILD WINGS INC's earnings per share declined by 12.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BUFFALO WILD WINGS INC increased its bottom line by earning $4.95 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $4.95).
- BWLD's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.33 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, BUFFALO WILD WINGS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: BWLD
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.