BJ's Solid Q3 Results & Q4-To-Date Trends Relative To Expectations

Wedbush analyst Nick Setyan reiterated a Neutral rating on the shares of BJ’s Restaurants Inc BJRI and raised the price target to $29 from $25.
The analyst believes BJ’s may have one of the tougher paths towards an eventual top- and bottom-line normalization within the casual dining peer set as the post-COVID new normal unfolds.
He added that the current discounts to its own pre-COVID multiples and casual dining peers may persist.
The restaurant chain reported Q3 earnings above the Street view.
Setyan said the primary driver of transaction improvement remains the return of dine-in sales as staffing levels improve.
The analyst noted that a return to pre-COVID margins remains difficult to foresee.
Resumption of shares repurchases could offer some level of downside cushion, Setyan said.
The analyst lists unexpected fluctuations in input costs, higher or lower than expected sales from new openings, and a general improvement or deterioration in economic conditions as possible risks to the valuation.
Price Action: BJRI shares are trading higher by 5.73% at $28.42 on the last check Friday.

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