Keybanc Downgrades Cracker Barrel to “Hold”; Says Commodity Costs Will Weigh on Shares (CBRL)


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Restaurant/retail store operator Cracker Barrel Old Country Store, Inc. ( CBRL ) on Friday received a big downgrade from analysts at KeyBanc.

The firm lowered its rating on CBRL from "Buy" to "Hold," citing worries about food inflation costs.

A KeyBanc analyst commented, "In the near term, we believe share appreciation is limited as elevated commodity costs will likely cause estimates to be revised downward. We lowered our FY13 EPS estimate to $4.60 from $4.67 (Street $4.70), because we expect Cracker Barrel's food cost inflation to be toward the high end of the 4-6% guided range during FY13 (July). We continue to have a favorable long-term bias toward the Company as management's sales-building plan should fuel momentum; guest traffic and SRS have been positive the past two quarters."

Cracker Barrel shares fell $2.17, or -3.3%, in premarket trading Friday.

The Bottom Line
Shares of Cracker Barrel ( CBRL ) have a 2.42% dividend yield, based on last night's closing stock price of $66.17. The stock has technical support in the $60-$61 price area. The shares are trading at all-time highs.

Cracker Barrel Old Country Store, Inc. ( CBRL ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks

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