Buy Rating and $40 Price Target for BJ’s Restaurants Amidst Market Undervaluation and Growth Potential

Nick Setyan, an analyst from Wedbush, maintained the Buy rating on BJ’s Restaurants (BJRI – Research Report). The associated price target remains the same with $40.00.

Nick Setyan has given his Buy rating due to a combination of factors surrounding BJ’s Restaurants’ ability to withstand current industry challenges and its potential for near- and medium-term growth. Setyan’s analysis suggests that the market’s current valuation of BJRI is excessively negative, failing to fully recognize the management team’s capability to manage short-term headwinds in the full-service restaurant category. He perceives BJRI as a company that is structurally sound and should command a valuation that falls between the structurally impaired segment of the industry and higher-performing peers such as Texas Roadhouse and Darden Restaurants.

The Outperform rating is anchored by a price target of $40, which is informed by an 8.1x EV/EBITDA multiple based on Wedbush’s 2024 EBITDA projections for BJ’s Restaurants. This multiple reflects a modest discount to the company’s historical median yet represents a slight premium over the median for the full-service segment. Setyan’s outlook acknowledges the existing challenges in unit economics and growth rate but still finds the discount to historical valuation metrics to be excessive, suggesting room for upside as BJRI navigates the current market landscape.

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BJ’s Restaurants (BJRI) Company Description:

BJ’s Restaurants, Inc. engages in the ownership and operation of casual dining restaurants. The firm operates BJ’s Restaurant and Brewery, BJ’s Restaurant & Brewhouse, BJ’s Pizza and Grill or BJ’s Grill. It offers pizzas, appetizers, specialty salads, soups, pastas, sandwiches, entrées, desserts, and proprietary craft beers. The company was founded in 1978 and is headquartered in Huntington Beach, CA.