Fill Up On BJ’s Restaurants: Barclays Sees 15%+ Upside
Shares of BJ’s Restaurants (BJRI)Â were climbing 3.1% in recent trading after Barclays initiated coverage of the stock with an Overweight rating. Â Analyst Jeffrey Bernstein established a $57 price target on the stock. He notes that the company has seen outsized earnings, unit and traffic growth that justifies its premium multiple–at 35 times forward earnings–to casual [...]

Shares of BJ’s Restaurants (BJRI) were climbing 3.1% in recent trading after Barclays initiated coverage of the stock with an Overweight rating.

 Analyst Jeffrey Bernstein established a $57 price target on the stock. He notes that the company has seen outsized earnings, unit and traffic growth that justifies its premium multiple–at 35 times forward earnings–to casual dining peers (a premium that he notes disappears when compared to higher growth peers, a comparison he sees more appropriate).

 ”In 2012 and more importantly long term, we expect unit growth to hold steady, while modest comp growth and continued margin expansion should support 22%+ EPS growth. As for key drivers, on revenue growth, we expect: 1) comp to stabilize at 3-4% and 2) unit growth to remain 12-13%, with potential to quadruple the number of restaurants from ~115 in 13 states today (guidance is a conservative 425+). On costs, with a diversified menu led by pizza & beer, and 2%+ pricing power, we expect further modest margin expansion above 21%. Beyond fundamentals, the balance sheet is conservative, with cash for unit growth and no current plan for share repo, dividend, leverage or acquisition.”

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