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Pro Analysis

JPMorgan downgrades Outback Steakhouse-owner on restaurant closures


Outback Steakhouse in Jacksonville Beach, Florida.
Diane Macdonald | Getty Images
Outback Steakhouse in Jacksonville Beach, Florida.

JPMorgan lowered its rating for Bloomin' Brands to neutral from overweight, because of deteriorating sales trends at its restaurants.

"We are downgrading BLMN … as our valuation call has run its course and the FCF yield is low – we prefer shares closer to $17," analyst John Ivankoe wrote in a note to clients Tuesday. "The drumbeat of closures across the space is now becoming unmistakably louder as supply growth (unit) in excess of demand growth (employment) continues to pressure same-store traffic."