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Activist investor Starboard Value has acquired a stake of 9.9% in Bloomin’ Brands, according to a regulatory filing filed earlier today.
First published:2:16AM EST
Activist investor Starboard Value has acquired a significant stake (more than 5%) and become one of the top-five shareholders in restaurant holding company Bloomin’ Brands (NASDAQ:BLMN), the Wall Street Journal reported. The specific changes that Starboard might push for at BLMN remain uncertain. However, a proxy war could be around the corner as activist investors like Starboard often attempt to make changes within the company to drive improvements.
Bloomin’ Brands is among the leading casual dining restaurant companies in the world. It has over 1,450 restaurants across 13 countries.
Notably, Bloomin’ Brands stock has gained over 31% year-to-date. Meanwhile, it has more than doubled over the past three years. However, on a longer time horizon, the company has failed to create value for its shareholders and has underperformed the broader market averages. For instance, BLMN stock has gained a little over 26% in the past decade. The S&P 500 Index (SPX) has appreciated by about 164% during the same period. Further, the graph below shows that the stock has also lagged behind the SPDR S&P 500 ETF Trust (SPY), a proxy for the S&P 500 Index, over the past five years.
Bloomin’ Brands’ underperformance reflects the company’s inability to drive sales over the past decade. (See the image below.)
While its sales growth rate has disappointed, let’s look at what the Wall Street analysts recommend for BLMN stock.
Is Bloomin’ Brands a Buy?
Bloomin’ Brands has managed to increase its sales so far in 2023. However, the tough year-over-year comparisons keep analysts cautious. With three Buy and five Hold recommendations, BLMN stock sports a Moderate Buy consensus rating.
Meanwhile, analysts’ average price target of $29.71 implies 15.96% upside potential from current levels.
