With earnings slated for October 7, this is yet another casual dining company that should do well in its latest release.

Credit Suisse said it is downgrading Ruby Tuesday (RT) to neutral from outperform. Believes macro risks have increased markedly and balance sheet offers little room for error vs. guidance. Lowered target price to $9 from $11.

Like many restaurants, Ruby is caught between pricier ingredients and thriftier diners. Its debt load and debt servicing don't leave much room for stock buybacks or dividends. But at about 7, shares trade at 0.27 times projected 2008 sales. Left for dead by analysts, its price-to-book multiple of 0.9 is well below the peer average of 5.4. Full-service, sit-down restaurants are in a tough spot, but Ruby has been pushing value offerings (like a three-course dinner for two for $15.99) to nudge the average check up from about $11 or $12. Meanwhile, industry over-capacity is being remedied by rapid restaurant demises. The 20 largest casual-dining chains have increased locations some 45% over five years, far outpacing demand. But bankruptcy filings -- by Bennigan's and Steak and Ale chains last month -- will see business redistributed among peers like Ruby, Darden Restaurants (DRI) and Brinker International (EAT). In fact, Morgan Stanley reckons this may be the first year since 2004 when casual dining sales growth could overtake unit growth. And harried dual-income families will still need a place to eat -- and to drink -- in tougher times.

PE of 12 and a PEG of 0.91

7.1%

cheap

Ruby Tuesday (RT) was lowered by KeyBanc Capital Markets from Hold to Underweight.

Two directors recently bought 54,327 shares or $857,669 worth of stock.

Weak first-quarter results and a guidance reduction sent the company's share price down nearly 10 percent last week. Before that, shares were already down about 35 percent since October of last year.

The stock trades for 6x cash flows.

Market Perform - Price 20.11 on Sept. 17
by Morgan Keegan
Though RT appears relatively cheap based on several valuation metrics vs. peers, we believe appreciation may be limited pending sustained pick-up in operating trends.

Ruby Tuesday (RT) was upgraded by JP Morgan from Neutral to Overweight.

no sign of growth and no dividends