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Pro Analysis

Buffalo Wild Wings shares may have reached a ceiling, BMO says

Buffalo Wild Wings
Source: Buffalo Wild Wings

Buffalo Wild Wings shares may have reached a ceiling, according to BMO Capital Markets, who downgraded the stock to market perform from outperform on Tuesday, citing limited upside potential and stretched valuations.

"We believe investors should wait for a more attractive entry point given 25% increase in valuation over the last five months (more than double casual dining average), near-term guidance risk, and our cautious approach to relying on a pull-forward of timing and strong execution of initiatives," equity analyst Andrew Strelzik wrote in a note to clients.

Since the end of October, shares of the casual-dining restaurant are up more than 20 percent, reaching a 52-week high in December, in part due to investors' hopes that lower taxes under President-elect Donald Trump would boost discretionary spending.