Analyst: Dump This Stock Before Earnings

BofA-Merrill Lynch downgraded BLMN shares to "underperform"

by Andrea Kramer

Published on Feb 8, 2019 at 10:53 AM

The shares of Outback parent Bloomin' Brands Inc (NASDAQ:BLMN) are lower this morning, after BofA-Merrill Lynch downgraded the stock to "underperform" from "neutral." The brokerage firm also cut its price target to $17 from $23, representing a discount to BLMN's close of $19.17 on Thursday. BofA-Merrill Lynch said the restaurant company will likely issue a disappointing forecast when it reports earnings next Thursday, Feb. 14.

BLMN stock was last seen 3.8% lower at $18.43. The security had a strong start to 2019, rallying more than 7% in the first week of the year -- its best week since early November. However, the shares have since backpedaled from the round-number $20 region -- home to a 61.8% Fibonacci retracement of BLMN's decline from its November peaks to its Dec. 24 low -- and have spent the past month in a channel of lower highs and lows.

BLMN stock chart feb 8

Most analysts are already wary of Bloomin' Brands. Prior to today's downgrade, the equity boasted just three "buy" or better ratings, compared to six "holds." Meanwhile, the consensus 12-month price target of $21.90 represents a premium of just 18% to BLMN's current price.

Looking at the company's earnings history, BLMN stock has been flat or moved higher the day after six of the last eight quarterly releases. In October, the equity edged 1.8% higher the day after Bloomin' reported. On average, the shares have moved 4.2% the day after the last eight earnings, regardless of direction. This time around, the options market is pricing in more than double that move for BLMN, with implied volatility data indicating a 9.6% swing.

SAGE Therapeutics Stock Hot Ahead of Earnings
The drug name is scheduled to report on Tuesday
Bear Signal Flashing for This Healthcare Stock Before Earnings
At least four analysts have issued price-target cuts on the stock this week
Signal Says This Retail Stock's on Sale
The shares pulled back this week on news of a Levi Strauss IPO
START YOUR DAY SMARTER.

Get Schaeffer's pre-market news bulletin every morning before the bell rings.
It's free to sign up.


Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
3 of Today's Worst Nasdaq Stocks
The stocks are sitting out today's rally in the broader equities market
2019 Rally Continues for Stock Market
The Nasdaq is eyeing its longest weekly win streak since 2016
How American Lithium Tech May Be Poised for 614% Growth
A new lithium technology could change the face of lithium production forever.