Bob Evans Farms shares rise after upgrade
Bob Evans Farms Inc.'s shares rose Wednesday after a KeyBanc Capital Markets analyst upgraded his rating on the company's shares, saying he expects a possible sale of one of the company's restaurant chains to help earnings.
THE SPARK: Analyst Christopher O'Cull raised his rating on the company's stock to "Buy" from "Hold" and established a $45 target price.
THE BIG PICTURE: The company operates the Bob Evans and Mimi's Cafe restaurant chains. Bob Evans has been updating many of its locations to draw more customers, and the company is reviewing "strategic alternatives" for Mimi's Cafe.
That can often mean a sale of the business.
Bob Evans also sells sausage and other foods under the Bob Evans and Owens brand names, and recently acquired Kettle Creations, which makes mashed potatoes, macaroni and cheese and other side dishes, to expand its foods business.
THE ANALYSIS: O'Cull said he believes that the company will soon sell its Mimi's Cafe brand as a result of the review. He also predicted growth in the company's food packaging business and increased sales at remodeled Bob Evans restaurants, all of which should improve profits.
A message left seeking comment from Bob Evans Farms was not immediately returned.
SHARE ACTION: Shares gained $1.53, or 4.1 percent, to $38.72 in afternoon trading. Its shares are near the high end of its 52-week trading range of $31.23 to $41.65.