Bowlero's stock is a buy after strong boost in foot traffic in February, says Jefferies

By Ciara Linnane

World's biggest operator of bowling alleys is rated a buy by all 10 analysts on FactSet

Bowlero Corp., the world's biggest operator of bowling alleys, enjoyed a strong boost in foot traffic trends in February in a signal that demand is accelerating, according to Jefferies analysts.

The Jefferies team led by Randal J. Konik reiterated their buy rating on Bowlero's stock (BOWL) in a note to clients on Thursday, in which they also welcomed the news that Zac Sulma has been promoted to chief sales officer. Sulma has been with the company since 2008, starting as an assistant manager at AMF Houston Lanes.

Sulma will oversee the company's national sales program and work to bolster its market position.

The news comes after company earlier this week opened a new Lucky Strike location in Miami, its second new build for the brand, which Bowlero acquired last September in an all-cash deal valued at about $90 million.

Analysts are unanimously bullish on the stock. All 10 analysts offering coverage on FactSet have buy ratings on the stock, which is down 3.3% in the year to date, while the S&P 500 SPX has gained 10.2%.

Bowlero went public in 2021 by merging with a special-purpose acquisition corporation. The company beat second-quarter revenue estimates last month thanks to strength in its events business and said it would start paying a dividend to shareholders.

The 5.5 cent dividend was paid on March 8 to shareholders of record as of Feb. 23.

Jefferies foot-traffic data suggests an improvement in February over January.

"Meanwhile, the two-year stacks were up 22.0% in February compared to up 12.4% in January and down 7.0% in November, a significant improvement, in our view," the analysts wrote.

Jefferies has a $30 price target on Bowlero's stock, which is more than double its closing price Thursday at $13.70.

-Ciara Linnane

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03-29-24 1027ET

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