What Happened?
Shares of restaurant company Bloomin’ Brands (NASDAQ:BLMN) fell 13.8% in the afternoon session after Bank of America Securities trimmed its price target on the stock to $5 from $6 and maintained its Underperform rating.
This action signaled a less optimistic view from the investment bank regarding the stock's future performance. A price target represents the level at which an analyst believes a stock is fairly valued. Lowering this target, alongside an "Underperform" rating, suggested that BofA Securities expected the stock to perform worse than the overall market. Such negative commentary from a financial analyst often influences investor sentiment, which can lead to a drop in a company's stock price.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bloomin' Brands? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Bloomin' Brands’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. But moves this big are rare even for Bloomin' Brands and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 3.6% on the news that positive sentiment lifted the casual dining sector, highlighted by a significant analyst upgrade for competitor Brinker International (EAT).
The positive mood was sparked when UBS upgraded peer company Brinker International from a "Neutral" rating to a "Buy" and raised its price target. This action suggested growing confidence in the sit-down dining industry. Broader optimism was also present in the restaurant sector, as a survey of industry leaders showed that 82 percent expected growth to improve or remain stable in 2026 despite labor and economic pressures.
Bloomin' Brands is up 3.9% since the beginning of the year, but at $6.63 per share, it is still trading 48.6% below its 52-week high of $12.89 from January 2025. Investors who bought $1,000 worth of Bloomin' Brands’s shares 5 years ago would now be looking at an investment worth $311.30.
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