) to buy from neutral on valuation.
Analyst Andrew Barish says he believes the recent 25% decline in the stock price following the Aug. 11. 2005 CEO and senior vice president resignation is overdone. He notes he's comfortable that personal expense issues are the only factor behind changes, not pervasive accounting concerns. He likes the Red Robin Gourmet Burgers concept and execution.
Barish notes the third quarter was guided flat to down with higher pre-opening, general and administrative expenses, but thinks 2006 will be a year of at least 20%-plus earnings per share growth.
He sees $1.75 2005 EPS; and $2.15 2006 EPS on 2%-3% higher same-store sales. He has a $54 target price, about 25 times his 2006 EPS estimate.