Analyst lifts Buffalo Wild Wings price target
NEW YORK (AP) — Shares of Buffalo Wild Wings touched an all-time high Monday as an analyst increased the restaurant operator's price target, citing stable chicken wing costs and better-than-expected growth in a key revenue metric.
THE SPARK: Nick Setyan of Wedbush raised the price target of Buffalo Wild Wings Inc. to $135 from $120 and maintained an "Outperform" rating.
THE ANALYSIS: Setyan said in a client note that chicken wing costs appear to be relatively stable, which is better than the increase he had predicted. The analyst still expects third-quarter wing costs of $1.65 per pound, but is lowering his fourth-quarter estimate to $1.75 from $1.80 per pound.
Setyan said that a check of 10 percent of company-owned restaurants indicates that third-quarter-to-date sales at stores open at least a year is up more than the 2.8 percent he forecast. This figure is a key gauge of a restaurant operator's health because it excludes results from locations recently opened or closed, thereby measuring growth at continuing locations.
Setyan said that sales at stores open at least a year improved in August and September, thanks to the beginning of football season and some specials and promotions that drove traffic. The company's performance has also been helped by a 1 percent increase in menu prices effective July 15, and an extra week of NFL and NCAA football games.
A representative for Buffalo Wild Wings did not immediately respond to an email seeking comment.
SHARE ACTION: Up $2.26, or 2.1 percent, to $111.79 in afternoon trading. The stock hit an all-time high of $113.12 earlier in the session. Year to date, the shares are up more than 50 percent.