Jefferies Cuts Price Target on Sonic Corp (SONC) to $26 Following 4Q
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Jefferies maintained a Hold rating on Sonic Corp (NASDAQ: SONC), and cut the price target to $26.00 (from $28.00), following the company's 4Q earnings report. The company did not provide intra-quarter SSS trends, guesses based on commentary during the conference call is that QTD F1Q SSS remains down at least 2%.
Analyst Alexander Slagle commented, "Stock to be down as F17 guide for negative SSS (-2% to flat) and down earnings (-7% to flat) is well below Street’s optimistic +1.2% SSS & +12% EPS, and likely below even the most conservative investor expectations. Investments in people, technology & growth infrastructure should set the brand up for success down the road, but unfortunately these costs are weighing on margins more than expected as SSS slow on competitive headwinds & visibility remains limited."
Shares of Sonic closed at $26.49 yesterday.
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