Proactive Changes Drive Success: How BJ's Restaurants Is Set To Exceed Conservative Projections According To This Analyst

Wedbush analyst Nick Setyan reiterated an Outperform rating on the shares of BJ’s Restaurants Inc BJRI with a price target of $38.

The analyst’s Q2 checks point to same-store-sales (SSS) growth trending at least in-line with the consensus of 4.4%.

The analyst said that positive call outs included improved guest traffic, sustained levels of off-premise sales, and improved staffing levels.

The analyst continues to view the comp contribution from remodels, increased operating hours, and a more experienced managerial and hourly staff as drivers of SSS growth in 2H.

The analyst also views the category-wide uptick in comp and transactions in June as a positive sign that the choppiness experienced in 2H22 will be more stable in 2H23.

The analyst lowered Q2 labor estimate to 36.8% from 37.0% and believes labor efficiencies, from better scheduling to a more seasoned staff, have contributed to a lower labor expense run-rate.

The analyst increased the 2023 EPS estimate to $0.83 from $0.76 and the 2024 EPS estimate to $1.31 from $1.26.

Given the expectation of near- and medium-term upside, the analyst expects BJRI's current 6.8x EV/EBITDA multiple on the 2024 EBITDA estimate of $112 million to expand.

Price Action: BJRI shares are trading higher by 10% at $35.15 on the last check Wednesday.