Mizuho upgraded BJRI to Outperform on Thursday, raising its target to $76 from $74. That implies 33% upside from a stock that has fallen 12% in the past month. The upgrade lands while short sellers are moving the other way, pushing short interest to 10.3% of free float, up 56% over the past month.
Mizuho's Nick Setyan lifted his rating from Neutral, joining William Blair's Sharon Zackfia, who upgraded to Outperform back in July. Benchmark has maintained a Buy with an $80 target. The consensus remains Hold, with five Hold ratings and a mean target of $75.14. The stock closed Tuesday at $57.29, sitting well below that consensus target.
The Barclays bear case is still on the register. Jeffrey Bernstein carries an Underweight with a $38 target. That spread between $38 and $80 across the analyst community reflects a genuine split on how quickly BJ's Restaurants can recover margins in a tight labor market.
Short interest stood at roughly 1.4 million shares at the start of September. By September 23 it had jumped to 1.94 million. It now sits at 2.17 million, or 10.3% of free float. Days to cover is 4.56 based on the latest FINRA fortnightly figure.
Despite that build, the borrow market is not constrained. Availability is at 2,563% of short interest, meaning more than 25 shares are available to lend for every one already borrowed. Cost to borrow has collapsed 90% in the past week to 0.04%, its lowest level on record. There is no sign of a supply squeeze in the lending market.
The put/call ratio on BJRI is 0.38, well below its 20-day mean of 0.58. That z-score of negative 1.15 shows call positioning is relatively elevated. Options traders are not aligned with the short sellers. That divergence is worth watching into the next earnings print, scheduled for October 29.
Director Richmond C Bradford made three open-market purchases in late August and early September, spending roughly $108,000 in total at prices between $59.50 and $63.25. Those trades are not large, but they were discretionary and came as the stock was pulling back from its summer highs. Net insider value across all transactions over the past 90 days is negative $6.4 million, largely driven by EVP Kendra Miller exercising and selling options in August.
What to watch: The October 29 earnings report is 28 days out. Short interest is building and cost to borrow is near zero, which means shorts face minimal carrying cost. The Mizuho upgrade and call-heavy options positioning pull the other way. Something will give around the print.
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