Shares of casual restaurant operator and pork purveyor Bob Evans Farms
It's a bad time for bad things to be happening to a company that makes perhaps the world's greatest indulgent breakfast: the Sunshine Skillet. Reports from other casual chains suggest that there's money to be made, particularly on the lower end of the price scale inhabited by companies like Cracker Barrel
But with Bob Evans being pressured by disappointing sales and rising food prices -- which impact its sausage business, as well as its meat-and-eggs-heavy breakfast business -- the near-term outlook isn't a great one. The company is now pointing investors toward full-year earnings per share of between $1.80 and $2, down from last year's $2.03. (As recently as May 11, Bob Evans was projecting flat earnings.) And these estimates are based on a return to positive same-store sales and lower hog costs later this year.
Should investors start watching Bob Evans for signs that the shares have fallen enough? The company owns solid brands and has quality food and loyal customers, but value seekers may want to wait awhile on this one nonetheless. A multiple of 12.5 times forward earnings (using the high-end estimate) is appealing, but it seems like a lot to pay for zero growth or worse. If you don't mind waiting for a table, you might not mind waiting on the shares either.
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Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.