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UPDATE: Dougherty & Co Starts Carrol's Restaurant (TAST) at Buy

March 30, 2015 10:36 AM EDT
Get Alerts TAST Hot Sheet
Price: $9.51 +0.11%

Rating Summary:
    3 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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(Updated - March 30, 2015 10:37 AM EDT)

(Update corrects price target to $10.50 vs $10.)

Dougherty & Co initiates coverage on Carrol's Restaurant (NASDAQ: TAST) with a Buy rating and a price target of $10.50

Analyst Jeremy Hamblin said, "Carrols has rapidly grown its unit base from 297 stores in mid-2012 to 674 units at the end of 2014 via franchise acquisition and we expect units to grow another 25%+ to 850 units by 2017 in the same manner. Historically, TAST is able to improve restaurant margins 300+ bps on acquired units by reducing food waste and theft which helps to generate 30%+ ROIs on acquisitions. We anticipate that sky-high beef prices that cost TAST over $10 M in EBITDA on a $36 M base in FY14 will abate in 2H16 creating another tailwind for earnings growth. We initiate with a Buy rating and $10.50 PT which is based on 9.0x our FY16 EBITDA estimate of $56 M."

For an analyst ratings summary and ratings history on Carrol's Restaurant click here. For more ratings news on Carrol's Restaurant click here.

Shares of Carrol's Restaurant closed at $8.40 yesterday.



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