Sonic Corp (SONC): Too Cheap To Ignore - Oppenheimer

August 8, 2016 9:31 AM EDT
Get Alerts SONC Hot Sheet
Price: $26.01 +2.68%

Rating Summary:
    13 Buy, 10 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
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Oppenheimer analyst, Brian Bittner, reiterated his Outperform rating on shares of Sonic (NASDAQ: SONC) noting that the stock is under loved and under $30. The analyst is attracted to what he sees as a heavily discounted 18x P/E, 10x EBITDA and 7% FCF yield.

He sees 3 reasons to get aggressive on the name:

1) his analysis suggests minimized risk to EPS estimates through '17E

2) near-term SSS expectations are low (flattish), and it's track record of industry outperformance remains appealing

3) shifting to 95%-franchised without sacrificing EPS is under-appreciated

4) cash ($100M) and FCF ($80M) could repurchase 12% of shares, prior to more leverage

No change to the price target of $40.00

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 $28.02 yesterday.

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