Bob Evans' Stock Tumbles As Sales Results Prompt Analyst Downgrade

Shares of Bob Evans Farms tumbled 9.8% in morning trade Wednesday, after KeyBank Capital Markets downgraded them following the full-service restaurant operator's disappointing fiscal second-quarter sales results. Analyst Christopher O'Cull cut his rating to underweight from hold, and set a 12-month price target of $45, which is 11% below current prices. The company reported late Tuesday revenue of $333.3 million and same-store sales that were flat relative to a year ago, compared with the FactSet consensus analyst estimates of $343.9 million and growth of 1.3%, respectively. "Our concern is that [Bob Evans] is not addressing that fewer guests are eating in the restaurants, an issue that we estimate has presisted for at least 14 consecutive quarters," O'Cull wrote in a note to clients. The stock has lost 0.5% year to date, compared with a 12% gain in the S&P 500.