Red Robin Gourmet (NASDAQ:RRGB) is getting some defending comments from couple of firms:
- Jefferies notes RRGB reported 1Q08 EPS of $0.43, well short of the $0.50 Street estimate – with most sell-siders, including them, being caught off guard by greater than expected food costs and less than expected G&A leverage. Food cost pressure partially explained by sales mix shift and low 1Q07 food cost comparison. G&A pressure the result of advertising expense timing with an equal beneficial offset coming in 2Q08. With RRGB reiterating its full-year EPS guidance range (net of $0.04 acquisition accretion), Street numbers are likely headed up over balance of year offsetting the 1Q EPS shortfall on full-year basis. jeffco is sticking with theri 2008 EPS estimate of $2.13 as they raised EPS estimates last week to account for the acquisition accretion.
With shares up almost 20% over the last 4 weeks– the in-line EPS guidance numbers and news of housing market headwinds will likely result in RRGB shares giving back a sizeable chunk of that move today. Key tenet of their Buy thesis remains intact and that is that with recent and expected earnings now among the most stable in the growth sector, they expect RRGB's relative fundamental strength in coming quarters to drive merit-based multiple expansion.
Reits Buy and $46 tgt.
- Morgan Stanley notes 1Q EPS fell well short of their mark ($0.43 vs $0.51), but the miss was entirely related to costs. Offsetting this, sales exceeded firm's expectations with comps up an industry leading 3.9%. RRGB raised annual guidance by $0.04 to account for a franchise
acquisition. While this back end loads 2008 EPS, they think it’s feasible based on current trends and increased pricing. With estimates essentially intact and valuation among lowest of peers, MSCO remains buyers of RRGB.
Reits Overweight and $46 tgt
Notablecalls: RRGB continues to be an analyst darling here & I think will provide a bounce opportunity today. The only question here is where to start scaling in. My gut tells me sub-$36 level is where I wanna start w/ $35 already representing a 'screaming buy' point.
The first miss is almost always forgiven. RRGB has a lot of West Coast exposure, so considering that the qtr was still fine.
- Jefferies notes RRGB reported 1Q08 EPS of $0.43, well short of the $0.50 Street estimate – with most sell-siders, including them, being caught off guard by greater than expected food costs and less than expected G&A leverage. Food cost pressure partially explained by sales mix shift and low 1Q07 food cost comparison. G&A pressure the result of advertising expense timing with an equal beneficial offset coming in 2Q08. With RRGB reiterating its full-year EPS guidance range (net of $0.04 acquisition accretion), Street numbers are likely headed up over balance of year offsetting the 1Q EPS shortfall on full-year basis. jeffco is sticking with theri 2008 EPS estimate of $2.13 as they raised EPS estimates last week to account for the acquisition accretion.
With shares up almost 20% over the last 4 weeks– the in-line EPS guidance numbers and news of housing market headwinds will likely result in RRGB shares giving back a sizeable chunk of that move today. Key tenet of their Buy thesis remains intact and that is that with recent and expected earnings now among the most stable in the growth sector, they expect RRGB's relative fundamental strength in coming quarters to drive merit-based multiple expansion.
Reits Buy and $46 tgt.
- Morgan Stanley notes 1Q EPS fell well short of their mark ($0.43 vs $0.51), but the miss was entirely related to costs. Offsetting this, sales exceeded firm's expectations with comps up an industry leading 3.9%. RRGB raised annual guidance by $0.04 to account for a franchise
acquisition. While this back end loads 2008 EPS, they think it’s feasible based on current trends and increased pricing. With estimates essentially intact and valuation among lowest of peers, MSCO remains buyers of RRGB.
Reits Overweight and $46 tgt
Notablecalls: RRGB continues to be an analyst darling here & I think will provide a bounce opportunity today. The only question here is where to start scaling in. My gut tells me sub-$36 level is where I wanna start w/ $35 already representing a 'screaming buy' point.
The first miss is almost always forgiven. RRGB has a lot of West Coast exposure, so considering that the qtr was still fine.
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