BJ’s Restaurants (NASDAQ:BJRI) managed to whet some appetites among analysts, which lit a fire under its share price, sending it up just over 3% at the time of writing. The biggest reason for the new attention? Significant new upside possibilities thanks to some changes at the chain.
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Wedbush pivoted on BJ’s with a Buy rating thanks to analyst Nick Setyan and his team, who look for first-quarter same-store sales growth that should either match or exceed consensus figures. Better yet, BJ’s should also benefit from improving supply chain operations and wage trends that are finally starting to regulate. And, a new menu poised for release this summer with 10% fewer items on it should also have a positive impact, as it means less inventory to stock and pay accompanying costs on. BJ’s has juggled its menu quite a bit in the last few months.
Back in January, it introduced the new “Kickin’ Chicken” sandwich, which was likely a nod to the growing chicken sandwich wars going on among several different restaurants. However, as CEO Greg Levin noted, it was in no hurry to pare down its menu to half its size or smaller. While BJ’s was known for its “broad menu,” offering over 145 menu items as of February 2023, it still intends to offer a “deeper menu” than standard casual restaurants do. That’s an important competitive distinguisher and should help keep BJ’s from becoming another face in the crowd.
It could use the help, too. Currently, analyst consensus calls BJ’s Restaurants stock a Hold, with four Buy ratings, three Holds, and two Sells. However, BJRI stock also offers 16.84% upside potential thanks to its average price target of $33.44 per share.
