Zacks Investment Research downgraded shares of Buffalo Wild Wings Inc. (BWLD) from OUTPERFORM to NEUTRAL on August 14, 2014, with a target price of $151.00.
Buffalo Wild Wings' second quarter 2014 adjusted earnings of $1.25 per share beat the Zacks Consensus Estimate by a nickel and were up 42% year over year on the back of solid top-line growth and lower cost of sales. Total revenue increased 20% year over year and also beat the consensus mark by 1.4% driven by strong comps and new unit openings. The company has been consistently posting positive comps for the past two years. Further, we are encouraged by the company's strong market standing, new menu launches and increased media exposure. Also, its associations with the NCAA and beverage chains increase its visibility as a brand. Despite all these positives, we revert to a Neutral recommendation on Buffalo Wild Wings from Outperform given the rising cost burden on the company. Food, labor and other costs are expected to dampen 2014 earnings.
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