BJ’s Restaurants (BJRI) – Bear of the Day
Source: http://www.zacks.com/commentary/11743/BJ%27s+Restaurants+%28BJRI%29+-+Bear+of+the+DayPosted on Thursday, August 6th, 2009 | In Market Commentary, Stocks to Watch
Contributed by: Zacks Market Commentaries (http://www.zacks.com/) -
BJ’s Restaurants, Inc. (BJRI) has grown rapidly with its unique concept and high-quality food offered at various price points, while maintaining some of the best unit economics in the industry. Same-store sales, although weak, are outperforming the peer group.
Longer-term, however, we think BJ’s 20%+ unit growth target could become unmanageable or difficult to fund. Since 2002, ROE/ROIC have averaged in the mid single-digits, with full-year results rising above 6% only once, when ROE reached 8% in 2005.
Returns on capital must improve to support long-term growth. Trading at a premium to its growth rate (26x 2010E), we believe BJRI shares are richly priced.Zacks Investment Research
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