SINGAPORE (Nov 11): Daiwa has downgraded Breadtalk from “buy” to “outperform” and lowered its target price to $1.29 from $1.31 due to its mixed 3Q results.

In a Tuesday report, analyst Shane Goh said BreadTalk’s results for 3Q15 were “a tale of two halves”.

Although revenue for the restaurant segment grew 11.8% from a year ago, 4.1% above Daiwa’s forecast, revenue for the bakery and food court segments was up 2.7%, 4.1% short of its forecast.

Management shared that recent negative newspaper headlines, which Goh expects to be a one-off event, dampened sales at its bakery outlets in Singapore and China for about a month, while the Malaysia and Hong Kong outlets underperformed.

Still, given the strong outlook for the restaurant business, Goh is raising its sales per outlet for the segment by 3.5-13.7% for 2015-17E, mitigating a 1-2% cut in our food court and bakery sales per outlet forecast given the recent underperformance.

Breadtalk is down 7.5% at $1.11.