Q4 Preview: Buffalo Wild Wings (BWLD) Growth Is Strong, But Analysts Unsure on Future of Wing Prices


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Shares of Buffalo Wild Wings Inc. (Nasdaq: BWLD) are trading down roughly 2 percent Monday ahead of the release of its fourth-quarter results after the closing bell on Tuesday February 7th.

The Wall Street quarterly consensus for Buffalo Wild Wings is $0.67 per share in earnings on $210.25 million in sales. During the fourth quarter of last year, the company reported earnings of $0.55 per share on $163.94 million in total sales.

For the full year 2011, analysts on the Street are currently estimating $2.67 per share in earnings on $774.66 million in total sales.

The fourth quarter conference call is scheduled for 4:00 pm CT on February 7, 2012.

According to data from Bloomberg, shares of Buffalo Wild Wings have ten Buy ratings, eight Hold ratings and one Sell ratings. The average price target on shares of BWLD is $71.50 with a range from $56 to $90.

Analyst Comments:

  • Going into the release Deutsche highlights two reasons why it anticipates a decline in wing prices. First, the spread between wings and feed costs are now at a 5-year high of ~$1.52/lb, substantially above the 5-year low of ~$0.42/lb, which wings were at in June of 2011. Also, historically, wing prices fall 15 percent between February and May.

    For the quarter, the firm's earnings estimate of $0.65 per share is slightly below the Street's.

    Deutsche still believes a 20 percent earnings growth in 2012 is achievable and is reaffirming its Buy rating and $76 price target on the company going into the release.

  • Wedbush notes recent market checks indicate same-store-sales growth forecasts may prove to be conservative. The firm estimates earnings will total $0.67 per share for the quarter on $209.2 million in revenues. Wedbush believes there maybe another 1 percent increase in wing prices, on top of 2 percent increase already presented in the company's fiscal 2012 guidance.

    An analyst at Wedbush comments, "We believe BWLD's current discount to its growth peer group is unwarranted given its best-in-class unit growth rate, steadily improving cash-on-cash returns, improved and defensible unit economics, and near-term SSS momentum."

    Wedbush is reiterating its Outperform rating and $82 price target on the company going into the release.

  • Analysts at DA Davidson forecast a 47 percent increase in the price of wings over 2012 and has cut its FY12 and FY13 earnings estimates from $3.45 and $4.25 to $3.20 and $4.05.

    The firm reports overall, "BWLD is taking share from peers due to reinvestments in the business, differentiation, and younger stores. These benefits are sustainable and we are encouraged that management is focused on driving the business with transaction growth rather than through aggressive pricing. We are comfortable with the 1,500 store target, which provides several years of double-digit unit growth. Importantly, new stores are generating stronger sales productivity as the brand expands to the coasts."

    DA Davidson estimates earnings of $0.67 per share on $208.5 million in total sales for the quarter. The firm is maintaining its Buy rating and $90 price target ahead of the release.

    Dougherty & Company is bullish on the quarter going into the release as it forecasts earnings of $0.70 per share on $212 million in sales and a 7 percent increase in comps. The firm's bullish expectations reflect a stronger sporting event season. There were 9 UFC fights throughout the fourth quarter, versus 6 in the prior year period. Teams within the company's core regions also performed better this year when compared to last.

    Dougherty is reaffirming its Neutral rating and $66 price target on the company ahead of the release.

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

This article appears in: Investing , Stocks

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