Wedbush Raises Price Target on Del Taco Restaurants (TACO) to $17 Following Strong 3Q
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Wedbush reiterated an Outperform rating on Del Taco Restaurants (NASDAQ: TACO), and raised the price target to $17.00 (from $15.00), following the company's 3Q earnings report. EPS of $0.13 was a penny above consensus, but higher G&A and tax rate limited flow-through. SSS growth of 7.1% at co-owned and 6.2% franchised were well above 4.0% and 3.3% consensus. Adjusted EBITDA guidance was increased to $69-70M from $67.5-70M previously, on SSS growth. FY16 EPS guidance of $0.53-0.56 was reiterated.
Analyst Nick Setyan commented, "We believe there is a disconnect between Del Taco's category-leading fundamentals and its category-trailing valuation. We believe the company's current discount to QSR peers is poised to narrow as management continues to execute towards annual guidance, and as investor awareness of TACO's compelling fundamentals increases."
Shares of Del Taco Restaurants closed at $12.63 yesterday.
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