On Tuesday, Bloomin' Brands Inc. (NASDAQ:BLMN) experienced a slight adjustment in its stock outlook as Jefferies maintained a Buy rating but reduced the price target to $33 from the previous $34. This change comes amidst news of the company's CEO planning to retire and the initiation of a strategic review of its Brazilian operations.
The company's Board of Directors is beginning the search for a new CEO as the current leader has announced intentions to step down. At the same time, Bloomin' Brands is evaluating its business in Brazil, which has been performing well but is believed to be undervalued within the company's overall market valuation. This assessment is a strategic move considering the company's trading at approximately five times its EBITDA.
For the first quarter, Bloomin' Brands reported positive same-store sales (SSS) at Carrabba's Italian Grill, while its Outback Steakhouse locations in the United States surpassed expectations with increased customer traffic compared to the broader industry. Still, the company faced challenges with its other brands, which did not perform as strongly, and earnings per share (EPS) were affected by external pressures on revenues and margins.
The analyst from Jefferies reaffirmed the Buy rating with a new price target of $33, citing an opportunity for value creation that is currently not being fully recognized by the market. Despite the slight decrease in the target price, the firm's outlook remains positive on the stock's potential.
InvestingPro Insights
As Bloomin' Brands Inc. (NASDAQ:BLMN) navigates through leadership transitions and strategic evaluations, real-time data from InvestingPro provides a snapshot of the company’s financial health.
With a market capitalization of $2.09 billion and a P/E ratio that has adjusted to 7.57 in the last twelve months as of Q4 2023, Bloomin' Brands shows signs of affordability in its stock price relative to earnings. The company's revenue growth of 5.77% over the same period indicates a steady increase in business activity. Moreover, the dividend yield stands at 3.85%, rewarding investors while the company explores strategic options.
Two InvestingPro Tips that might be of interest to investors considering Bloomin' Brands are the analysts' upward revisions of earnings for the upcoming period, and the prediction that the company will be profitable this year. These insights suggest a positive outlook on the company's earning potential, which may be a factor in the strategic decisions ahead.
For a deeper analysis, investors can explore the 7 additional InvestingPro Tips available at: https://www.investing.com/pro/BLMN. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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