Stifel Remains Sidelined on Zoe's Kitchen, Inc. (ZOES) Following 2Q Report
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Stifel reiterated a Hold rating on Zoe's Kitchen, Inc. (NYSE: ZOES) following the company's 2Q earnings report. ZOES reported EPS in-line with both Stifel's and consensus estimates. Stifel reduced 2H16/2017 EPS estimates by -$0.03/-$0.03 to -0.02E/$0.20E (vs. our prior $0.01E/$0.23E and consensus’ $0.02E/$0.23E).
Analyst Paul Westra commented, "We reiterate our more cautious view on Hold-rated ZOES on an expected -15% lower opening after ZOES posted a “worse” 2Q16 release that included: (1) in-line 2Q16 OpEPS of $0.06 (vs. consensus’/our $0.06E) driven by mixed (a) -110bps/+40bps worse/better 2Q16 comps/store-margins of +4.0%/21.7% (vs. consensus’ +5.1%E/21.3%E); but where, most importantly, and as we cautioned within our recent downgrade notes (see 07/26/16 Restaurant Industry/ZOES reports), mgt issued much-worse (2) -270bps/-110bps below-consensus implied midpoint 2H16 comps/store-margin guidance of +2.0%/19.2% (vs. consensus’ 2H16’s +4.7%E/20.3%E). We reduce our forward 2H16 comp outlook by -250bps to +2.0%E (vs. prior +4.5%E; consensus’ +4.7%E) and reduce our forward 2H16/2017 EPS outlook by -$0.03/-$0.03 to -0.02E/$0.20E (vs. our prior $0.01E/$0.23E; consensus’ $0.02E/$0.23E) and continue to believe that ZOES shares are fairly valued trading at a 2017 P/E of 155-times."
Shares of Zoe's Kitchen closed at $37.25 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View
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