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Key Banc downgrades Bob Evans

The Associated Press

KeyBanc Capital Markets analyst Christopher O'Cull downgraded his rating on restaurant chain Bob Evans Farms Inc. Friday, citing concerns about its near-term performance.

THE OPINION: Bob Evans operates both a restaurant side of its business and a packaged food business. O'Cull said that he continues to see the company's plan to reinvigorate its Bob Evans restaurant chain and expand its foods division as a positive move, but he has less confidence that the company's near-term performance will exceed market expectations.

The analyst previously had a "Buy" rating on the shares, based on the assumption that the sale of its Mimi's Cafe chain and food division growth could drive future earnings beyond market forecasts. But the company's margins for its packaged foods look uncertain because of higher marketing costs. And the proceeds from its recently announced $50 million sale of Mimi's were disappointing. O'Cull downgraded the shares to "Hold".

The company is expected to report its full quarterly results on Feb. 19

THE STOCK: Shares of Bob Evans fell 72 cents to $43.55, amid a broader market rally. The stock is still near the high end of its 52-week trading range of $34.43 to $45.36.