Analyst: Buffalo Wild Wings stock is expensive

posted: 30 DAYS 4 HOURS AGO

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NEW YORK -Shares of Buffalo Wild Wings Inc. are costly and quarterly earnings results were "uninspiring," an analyst said Wednesday.

Bryan Elliott of Raymond James said the restaurant operator's third-quarter earnings failed to impress as they benefited from lower-than-expected preopening costs and a slightly lower tax rate.

Late Tuesday, the company based in Minneapolis reported a profit of 38 cents per share, which met the estimates of analysts surveyed by Thomson Reuters. Analysts' estimates normally exclude one-time items. Buffalo Wild Wings also reported that its sales climbed 25 percent to $132.7 million, but those results missed Wall Street's $136.7 million forecast.

Buffalo Wild Wings' stock shed $1.77, or 4.2 percent, to $39.88 in midday trading.

Elliott said the company's stock is the second most expensive within his coverage, and that its price "could limit upside potential and create disappointment risk if expectations become overly optimistic." He maintained an "Underperform" rating.

But not everyone was as downbeat as Elliott. Jeff Farmer of Jefferies & Co. was pleased with the company's October to-date results for sales at stores open at least a year, which climbed about 6 percent.

Sales at stores open at least a year are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Farmer said the performance was the best in the casual dining industry, and he reiterated a "Buy" rating.

Over the past year, the shares have traded in a range of $14.50 to $44.79.

2009-10-28 12:55:27