Wells Fargo Starts Fiesta Restaurant Group (FRGI) at Outperform

July 18, 2013 8:38 AM EDT
Get Alerts FRGI Hot Sheet
Price: $26.60 --0%

Rating Summary:
    4 Buy, 6 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 15 | Down: 17 | New: 10
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Wells Fargo initiated coverage on Fiesta Restaurant Group (NASDAQ: FRGI) with an Outperform rating and a price target of $38-$39. Analyst Jeff Farmer noted accelerating unit Growth with margin tailwinds.

"We expect to see share price appreciation driven by (1) sustained SSS outperformance, especially for the Pollo Tropical concept, (2) our expectation for accelerating system unit development to 10%+ by 2014, (3) an accelerating rate of operating income margin expansion in 2014 and beyond driven by a growing revenue mix of higher margin Pollo Tropical sales, restaurant-level cost control efforts and an accelerating rate of development for the low incremental expense Pollo Tropical international franchise units and (4) the potential for the highly accretive, and not-yet-reflected in Street estimates ($0.12 to $0.18 or greater annual EPS tailwind in 2014 and beyond, by our estimate), refinancing of high interest rate debt," said Farmer.

For an analyst ratings summary and ratings history on Fiesta Restaurant Group (NASDAQ: FRGI) click here. For more ratings news on Fiesta Restaurant Group click here.

Shares of Fiesta Restaurant Group closed at $33.78 yesterday.

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