UPDATE: Bank of America Downgrades Red Robin Gourmet Burgers on Valuation

In a report published Wednesday, Bank of America analyst Joseph T. Buckley downgraded the rating on Red Robin Gourmet Burgers (NASDAQ: RRGB) from Neutral to Underperform, but raised the price target from $64.00 to $80.00.

In the report, Bank of America noted, “We are lowering our rating on RRGB shares from Neutral to Underperform. The company's fundamental performance continues to be strong with 3Q results exceeding our expectations and prompting us to raise our EPS estimates from $2.34 to $2.38 in 2013 and from $2.60 to $2.85 for 2014. We are also raising our price objective from $64 to $80 driven by our higher estimates and a bump in our valuation thoughts to a significant premium P/E valuation of about 28x our 2014 EPS estimate (a 50% premium to casual dining peers). On an EV/EBITDA basis, our price objective represents a 10x multiple, a more modest premium of 10% versus casual dining peers.”

Red Robin Gourmet Burgers closed on Tuesday at $84.20.