JPMorgan downgrades Outback Steakhouse-owner on restaurant closures

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

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."