3 Restaurant Stocks to Watch Amid “Tightening Spending”

2. Bloomin’ Brands, Inc. (NASDAQ:BLMN)

Number of Hedge Fund Holders: 35    

Bloomin’ Brands, Inc. (NASDAQ:BLMN) owns and runs fine dining restaurants. In late July, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.68, beating analyst expectations by $0.06. The revenue over the period was $1.1 billion, up more than 4% compared to the revenue over the same period last year and beating expectations by $20 million. The firm raised guidance numbers for the coming quarter but said the profit benefits from the increased revenues would be offset by higher than expected inflation. 

On July 18, Morgan Stanley analyst John Glass maintained an Equal Weight rating on Bloomin’ Brands, Inc. (NASDAQ:BLMN) stock and lowered the price target to $21 from $26, noting that the restaurant sector would face softening sales as consumers face rising pressures. 

At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $219 million in Bloomin’ Brands, Inc. (NASDAQ:BLMN), up from 34 the preceding quarter worth $337 million.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tremblant Capital is a leading shareholder in Bloomin’ Brands, Inc. (NASDAQ:BLMN), with 2.6 million shares worth more than $43 million. 

In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bloomin’ Brands, Inc. (NASDAQ:BLMN) was one of them. Here is what the fund said:

“We initiated a new position in Bloomin’ Brands, Inc. (NASDAQ:BLMN), in the consumer discretionary sector. The owner and operator of upscale casual dining brands, including Outback Steakhouse and Bonefish Grill, the company utilized the challenges of the COVID-19 pandemic to implement new productivity operations for its waitstaff and focus on improving corporate margins. As we transition from pandemic to endemic, the company should be able to meet the rebound in restaurant attendance with an improved cost structure and better operating leverage. We believe these long-term improvements and increased demand for dining are not reflected in the current share price.”