UBS Cuts Price Target on Sonic Corp (SONC) to $28; Reiterates Neutral
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UBS maintained a Neutral rating on Sonic Corp (NASDAQ: SONC), and cut the price target to $28.00 (from $33.00), after adjusting estimates to reflect likely lingering sales weakness and volatility. 4Q adjusted EPS estimates were cut to $0.46 from $0.47.
Analyst Dennis Geiger commented, "We are lowering our F4Q system sss expectations to -0.5% from +0.5% given still challenging industry sales results and the impact from severe rainfall in key states. As a result, we're also trimming our adj. EPS estimate to $0.46 from $0.47. Our price target is reduced to $28 from $33 to reflect likely lingering sales weakness and volatility. That said, SONC's transition to an even greater franchise mix (~95%) should further de-risk earnings sensitivity and support a potential narrowing of the valuation gap to heavily franchised peers as sales trends show signs of improvement. But near-term, industry challenges and competitive pressures could weigh on sales growth and share gains."
Shares of Sonic closed at $26.25 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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