Deutsche Bank Retains Buy Rating of Buffalo Wild Wings
Monday, October 03, 2021 4:07 PM

Analysts at Deutsche Bank maintain Buy rating of Buffalo Wild Wings Inc. (Nasdaq: BWLD) as they remain optimistic on current sales trends and the company’s ability to post another year of 20 percent earnings per share growth next year. They set a price target of $74 for the stock.


DB analysts state that chicken is by far Buffalo Wild Wing’s most important food cost item, representing about 40 percent of cost of goods sold and elevated grain costs and supplier production cuts have raised concerns around chicken inflation next year. They add that they estimate 22 percent increase in wing prices and an 18 percent increase in breast meat would be needed to bring wholesale chicken prices back to levels more commensurate with current feed costs. They state that this level of inflation in the firm’s chicken costs could be offset with just fewer than 2 percent of menu pricing, which they believe is achievable. They add that actual chicken inflation will be influenced by numerous factors, including inventory levels, production decisions, bird weights, and demand. They add that the risks involving Buffalo Wild Wing’s include weaker consumer spending, volatility in input costs and competitive discounting/promotions.


On a year-to-date basis, Buffalo Wild Wings has a share performance of 35.33 percent, and as compared to Standard & Poor’s 500, it has an YTD share performance of 49.76 percent.


Buffalo Wild Wings is a casual dining restaurant and sports bar franchise in the US. It has a market capitalization of $1.09 billion with a P/E ratio of 24.620. It has more than 18 million outstanding shares.


Shares of Buffalo Wild Wings lost 5 percent or $2.99 to trade at $56.81.