On Wednesday, Bloomin' Brands (NASDAQ:BLMN) shares experienced a reduction in its price target from $29.00 to $27.00 by BMO Capital. The firm maintained a Market Perform rating on the stock.
This adjustment follows the company's first-quarter earnings per share (EPS) of $0.70, which missed the consensus by $0.04, attributed to weaker comparable sales and restaurant margins.
The company also provided second-quarter EPS guidance below the consensus, indicating that the current industry pressures might lead to performance at the lower end of the previously reaffirmed 2024 guidance ranges.
Bloomin' Brands, known for its Outback Steakhouse brand among others, is facing a challenging industry environment. Despite some early signs of improvement at Outback, the overall performance and outlook for the company are seen as limited. BMO Capital's revised estimates reflect these conditions and the resultant decrease in the price target.
In addition to the financial updates, Bloomin' Brands has announced the retirement of its current CEO and has commenced the search for a successor.
The company is also revisiting the strategic review of its operations in Brazil. These developments have the potential to create upside opportunities for the company, depending on the outcomes of these changes and reviews.
The news of the CEO's retirement and the strategic review in Brazil come at a time when the company is grappling with the broader industry challenges that are impacting its financial projections. The combination of leadership transition and strategic evaluations could steer the company in new directions.
The adjustment in Bloomin' Brands' price target by BMO Capital is a direct response to the company's latest earnings report and guidance, as well as the current state of the restaurant industry.
The firm's analysis takes into account the potential for positive changes arising from the company's strategic and leadership shifts, while also recognizing the immediate hurdles the company faces.
InvestingPro Insights
Recent analysis from InvestingPro provides additional context to Bloomin' Brands' current financial situation. With a market capitalization of $2.08 billion and a trailing twelve-month P/E ratio adjusted as of Q1 2024 at 10.07, the company appears to be valued more attractively compared to its earnings. Despite a modest revenue growth of 2.24% over the last twelve months, the company has experienced a quarterly revenue decline of 3.97% in Q1 2024, reflecting the challenges mentioned in the industry. The gross profit margin stands at 16.83%, which aligns with the concerns over restaurant margins highlighted in the article.
InvestingPro Tips suggest that Bloomin' Brands' stock is currently in oversold territory according to the RSI, which may interest potential investors looking for entry points. Moreover, while analysts have revised their earnings downwards for the upcoming period, they also predict the company will be profitable this year, which is corroborated by the company's profitability over the last twelve months. For readers interested in a deeper dive into Bloomin' Brands' financials and future outlook, InvestingPro offers additional tips. There are 4 more InvestingPro Tips available for Bloomin' Brands, which can be accessed with an exclusive 10% discount on a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24.
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