- Benchmark analyst Todd M. Brooks has reiterated a Buy rating on the shares of BJ’s Restaurants Inc BJRI and raised the price target from $35 to $41.
- The analyst believes that FY23 and FY24 are both likely to prove to be strong margin recovery years for BJRI and sees restaurant-level margins rebounding from an estimated 11.1% in FY22 to 14% in FY24.
- Management fully believes that the company will return to mid-teens plus restaurant level margins over time but a return to 14% restaurant level margin in FY24 unlocks meaningful adjusted EBITDA improvement, added the analyst.
- The analyst lowered the 4Q22 same-store sales assumption from an overly aggressive 8.5% to 7.0%, reflecting the industry-wide slowdown in traffic that casual dining concepts experienced in November before rebounding in December with improved holiday traffic.
- Restaurant concepts are enjoying a y-o-y traffic lift as the analyst is lapping the severe operational disruption in January/February ’22 from the Omicron variant and its impact on staffing levels.
- As announced in the 2Q22 conference call, BJRI management launched a margin improvement initiative that is targeted to generate 200 bps of cost savings for the company, added the analyst.
- The initiatives largely in place by mid-2023 will provide visibility into margin improvement that is not dependent on further menu price increases or commodity inflation, cited the analyst.
- As BJRI has materially lagged the commodity inflation experienced with menu price offsets, the analyst expects that the concept will continue to take price in FY23.
- Price Action: BJRI shares are trading higher by 2.03% at $31.20 on the last check Wednesday.
BJRIBJ's Restaurants Inc
$33.02-2.02%
Edge Rankings
Momentum
64.23
Growth
87.90
Quality
-
Value
52.56
Price Trend
Short
Medium
Long
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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