Sports bar chain Buffalo Wild Wings (NASDAQ:BWLD) today received some bearish commentary from analysts at Maxim Group, which noted that lower NFL ratings could seriously affect restaurant traffic.
The firm left its Hold rating unchanged but cut its price target on BWLD from $170 to $155. That new target suggests a smaller 10% upside to the stock’s Thursday closing price of $140.97.
From Maxim’s note to clients:
According to A.C. Nielsen, the total number of viewers for NFL football (broadcast and cable) is down 8.4% from 2015 levels, while average ratings are down 10.5% from 2015. Industry experts disagree about which factor has contributed most to the decline in NFL viewership—the lack of big games, the contentious Presidential election season, or viewers protesting players who refuse to stand for the national anthem—though they believe it likely is a combination of factors. As they attribute about 10% of BWLD’s total annual traffic to NFL games, they believe any decline in NFL viewership, if sustained, is likely to have a pronounced negative effect on traffic at BWLD.
Accordingly, the analyst also lowered its comparable sales estimates for the company through the end of the year. It now expects same-store sales reductions of 150bps for Q3, and a 100bps decline in Q4.
Buffalo Wild Wings shares were unchanged in premarket trading Friday after closing at down $3.85 (-2.66%) to $140.97 on Thursday. Year-to-date, BWLD has fallen 11.7%, versus a 5.29% gain in the benchmark S&P 500 index.