Analysts Pounding the Table on Burger King: 2 Firms Add to Buy Lists
We've got two highly convicted analyst calls on Burger King (NYSE: BKC) this morning: Goldman Sachs added the stock to its Conviction Buy list, while analysts at Piper Jaffray added the stock to its Alpha List.
Being added to either of the lists means that the respective firms see a sharp upturn in a stock price in the near-term. The perceived value, however, often turns into real value as clients follow the recommendation and buy the stock, driving up its price.
Lets take a look at the Piper Jaffray report in order to get a feel for why analysts are drooling over Burger King stock today.
To begin, Piper calls the entire quick-service sector naturally "recession-resilient". Specifically at Burger King, the firm is attracted to "Burger King's dynamic unit and earnings growth opportunities within this segment." The Piper report points out that Burger King's same store sales have remained in positive territory for the majority of the US recession given recent initiatives such as "extended hours and remodels." The firm believes these two initiatives alone could add at least 1% to Burger King's FY09 comps.
Piper Jaffray currently has a $26 price target on the stock, suggesting potential price appreciation of more than 26% from current levels. Goldman Sachs, meanwhile, has a $25 price target on shares of Burger King.
The stock is trading about $0.50, or 2.5%, higher on the analyst calls today.
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