Oppenheimer Remains Bullish Ahead of Sonic Corp's (SONC) 4Q Report

September 28, 2016 9:48 AM EDT
Get Alerts SONC Hot Sheet
Price: $25.40 --0%

Rating Summary:
    11 Buy, 12 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Oppenheimer maintained an Outperform rating on Sonic Corp (NASDAQ: SONC), and cut the price target to $33.00 (from $40.00), ahead of the company's 4Q earnings report. SONC pre-announced -2% SSS, vs sell-side's stale estimate of +0.5%. The company also announced 4Q16 adjusted EPS would be $0.43-0.45 vs. Street's $0.48.

Analyst Brian Bittner commented, "We are not blind to the agony of sales disappointments, but we view SONC's situation as an attractive entry because: 1) its lower-risk earnings model has major padding (e.g. flat SSS would still drive +9% '17E EPS growth), 2) this suggests the stock's valuation discount is not a value trap (sub-10x EBITDA for a franchised model), 3) SONC is a proven SSS outperformer with a unique pipeline of technology, product and marketing catalysts, and 4) its unique cash situation could drive 15%+ share count reduction over the next 12 months."

For an analyst ratings summary and ratings history on Sonic click here. For more ratings news on Sonic click here.

Shares of Sonic closed at $27.44 yesterday.

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