Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) jumped 10% in morning trading on Wednesday after reporting better-than-expected second quarter fiscal 2017 results yesterday. BTIG also upgraded the stock today from “neutral” to “buy.”
The restaurant chain reported earnings of $0.61 per share, excluding $0.08 from non-recurring items, which beat our consensus estimate of $0.51. However, the company’s earnings decreased 18.67% year-over-year.
Red Robin also reported revenues of $315.77 million, surpassing our estimate of $314.96 million. The restaurant chain’s revenues rose 3.3% year-over-year because of new restaurant openings and higher comps. The company plans to open nine more restaurants during the remainder of 2017.
Because of these positive results, BTIG upgraded Red Robin stock to from “neutral” to “buy,” giving the stock a new price target of $64. Analyst Peter Saleh says the company’s investments in value initiatives have led to positive traffic trends.
The investment firm also noted that Red Robin’s launch of online ordering this past April has added value to the company. Saleh predicts that Red Robin’s traffic “will remain positive” for the rest of 2017 and into 2018.
RRGB remains a Zacks Rank #4 (Sell), with a VGM score of ‘A.’
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