UBS Cuts Price Target on Sonic Corp (SONC) to $28; Reiterates Neutral

September 20, 2016 8:28 AM EDT
Get Alerts SONC Hot Sheet
Price: $25.52 +0.71%

Rating Summary:
    11 Buy, 12 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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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."

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 $26.25 yesterday.

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