Piper Jaffray Downgrades Fiesta Restaurant Group (FRGI) to Neutral

August 29, 2016 6:34 AM EDT
Get Alerts FRGI Hot Sheet
Price: $27.00 --0%

Rating Summary:
    4 Buy, 6 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 19 | Down: 13 | New: 9
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Piper Jaffray downgraded Fiesta Restaurant Group (NASDAQ: FRGI) from Overweight to Neutral with a price target of $25.00 (from $23.00), citing uncertainty around the CEO transition and strategic plan.

Analyst Nicole Miller Regan commented, "This change follows the recent announcement of the unexpected retirement of long-standing Fiesta CEO and the Board's subsequent decision to holistically reevaluate strategic plans. While we believe the broader industry is investable, we urge investors to become increasingly focused as it relates to human capital investments, brand/operational excellence, and earnings/ cash flow consistency. Longer-term we are generally positive on the opportunity for both of Fiesta's brands. That said, a lack of a clarified long-term strategic focus paired with ongoing operational challenges make it difficult to recommend FRGI shares. We await greater visibility into the search for a new senior leader/s, capital allocation plans (accelerating development or slowing unit growth for capital deployment back to shareholders), and/or options surrounding the sale of Fiesta's portfolio of concepts and/ or status as a public company. We prudently adjust our PT to $25 based on ~7x FY17E EBITDA."

For an analyst ratings summary and ratings history on Fiesta Restaurant Group click here. For more ratings news on Fiesta Restaurant Group click here.

Shares of Fiesta Restaurant Group closed at $24.97 yesterday.

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