BJ’s Restaurants stock dines to yearly high ahead of Q2 results

BJ’s Restaurants (BJRI) stock skyrocketed to reach a new 52-week high of $63.70 on Wednesday. Like Darden Restaurants (DRI) reported upbeat results in June-end, most of the companies in the restaurant industry are expecting to announce better results for their recently concluded quarter.

The number of people visiting restaurants is increasing day by day. Experts believe that a surge in sales is on cards as Americans are spending a sum equivalent to the $799 billion estimated last year by the National Restaurant Association. Also, the association projects that sales will grow by 4% this year. People who are going to fast-food chains are slowly shifting to restaurants due to their health-conscious nature.

Restaurants have considered delivery as an important strategy for surviving in the industry. And the smartphone dominance has changed the fate of restaurants as there has been a 10% increase in the number of deliveries. The ever-evolving nature of any business has led the restaurants to change their ways for survival and maximizing their profits.

Meanwhile, BJ’s Restaurants is scheduled to report its second-quarter earnings on July 26. Market analysts are expecting the company to report upbeat earnings for the quarter on a 6.20% revenue growth estimate. Majority of the analysts have maintained a Hold rating on the stock.

Research firm Stifel believes sales growth of the restaurant sector is likely to be driven by higher check averages with strong results on cards. For combating MSD hourly wage inflation, restaurants appear to be either lifting menu prices or discounting less. Stifel has maintained its Buy rating on BJ’s Restaurants.

In the recent first-quarter, the company’s operating income jumped 27% driven by slow roast menu items, Daily Brewhouse Specials, and its handheld server tablets. BJ’s Restaurants will open two to three additional restaurants in the second half of the year and five to six new restaurants in fiscal 2018.

Investors can consider BJ’s Restaurants as an investment option due to the robust future of the foodservice industry and Darden’s outlook. Investors could take a call on this stock based on their earnings results. Shares of BJ’s Restaurants had been trading between $28 and $63.70 for the past 52 weeks.

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