On Monday, Piper Sandler reiterated a Neutral rating with a $16.00 price target on shares of Bloomin' Brands (NASDAQ:BLMN). The firm's analyst highlighted the recent significant developments for the company, including the appointment of a new CEO in August and a Brazil re-franchising transaction expected to close by the end of December 2024.
The analyst pointed out that while these events have been noteworthy, the main focus is on the upcoming fourth-quarter 2024 earnings call, scheduled for February 2025. The call is anticipated to reveal detailed plans for the Outback U.S. brand and potential changes in capital allocation.
Bloomin' Brands, the parent company of Outback Steakhouse and other restaurant chains, has seen its shares decline approximately 55% year-to-date. The analyst noted that the forthcoming details to be shared in the earnings call should provide much-needed clarity to investors.
The company's strategic moves, including leadership changes and the re-franchising initiative in Brazil, are part of Bloomin' Brands' efforts to navigate a challenging market. Investors and stakeholders are looking forward to the February 2025 earnings call for a clearer picture of the company's direction and strategy moving forward.
In other recent news, Bloomin' Brands reported a decline in its fiscal third-quarter 2024 revenue and earnings per share (EPS). The company's Q3 revenues fell by 4% year-over-year to $1 billion, and the adjusted diluted EPS was $0.21, down from $0.41 in 2023.
The company also revised its full-year 2024 guidance, projecting an adjusted diluted EPS between $1.72 and $1.82. In response to these results, both BMO Capital Markets and Piper Sandler reduced their price targets for Bloomin' Brands from $20.00 to $16.00, maintaining their neutral ratings on the stock.
Furthermore, Bloomin' Brands confirmed Mike Spanos as the new CEO and announced a re-franchising transaction for its operations in Brazil. Despite facing increased labor wage inflation of 3.8% and higher operating expenses, Bloomin' Brands has repurchased 10.1 million shares for $266 million year-to-date. These are among the recent developments for the company.
Analysts from BMO Capital and Piper Sandler have expressed the need for a clearer and more compelling strategy to bolster investor confidence and improve the performance of its Outback Steakhouse brand. This comes in the wake of the company's announcement of lowered EPS guidance for 2024 by approximately 20%.
InvestingPro Insights
Bloomin' Brands' recent challenges, as highlighted in the article, are reflected in the latest financial data and analyst insights from InvestingPro. The company's market capitalization stands at $1.12 billion, with a concerning P/E ratio of -210.16, indicating current profitability issues. This aligns with an InvestingPro Tip that the company was not profitable over the last twelve months.
Despite these challenges, Bloomin' Brands offers a significant dividend yield of 7.28%, which could be attractive to income-focused investors. However, this high yield should be viewed cautiously in light of another InvestingPro Tip suggesting that the company operates with a significant debt burden.
The stock's recent performance has been notably weak, with a 27.45% decline over the past three months and a 36.03% drop over six months. This trend is consistent with the InvestingPro Tip indicating that the stock has taken a big hit over the last six months.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Bloomin' Brands, providing a deeper understanding of the company's financial health and market position.
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