Barclays Maintains an 'Equalweight' on Sonic (SONC); 4QF11 Comp Disappoints Despite Recent Uptick; F12 Guidance Tempers Expectation
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Price: $43.49 --0%
Rating Summary:
4 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 13 | New: 20
Rating Summary:
4 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 13 | New: 20
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Barclays maintains an 'Equalweight' on Sonic (NASDAQ: SONC) price target cut from $10.00 to $8.00.
Barclays analyst says, "As expected, SONC preannounced 4QF11 sales and offered initial F12 guidance, though lacking specifics on EPS as visibility limited. 4QF11 comps were below guidance and Street expectations, though have been positive since mid-August. As for F12 guidance, expect such to temper EPS expectations, especially as comp volatility leads to a lack of confidence in a sustainable uptick. Longer term, we continue to believe SONC's comp and unit growth is structurally challenged, unable to return to historical sales growth and peak restaurant margins. With competitive convergence ongoing and franchisees cautious on unit growth, these structural concerns keep us cautious despite the recent underperformance. We lower our estimates and price target accordingly." (FY11 EPS estimate cut from $0.58 to $0.56 and FY12 from $0.69 to 0.60)
For more ratings news on Sonic click here and for the rating history of Sonic click here.
Shares of Sonic closed at $6.78 yesterday.
Barclays analyst says, "As expected, SONC preannounced 4QF11 sales and offered initial F12 guidance, though lacking specifics on EPS as visibility limited. 4QF11 comps were below guidance and Street expectations, though have been positive since mid-August. As for F12 guidance, expect such to temper EPS expectations, especially as comp volatility leads to a lack of confidence in a sustainable uptick. Longer term, we continue to believe SONC's comp and unit growth is structurally challenged, unable to return to historical sales growth and peak restaurant margins. With competitive convergence ongoing and franchisees cautious on unit growth, these structural concerns keep us cautious despite the recent underperformance. We lower our estimates and price target accordingly." (FY11 EPS estimate cut from $0.58 to $0.56 and FY12 from $0.69 to 0.60)
For more ratings news on Sonic click here and for the rating history of Sonic click here.
Shares of Sonic closed at $6.78 yesterday.
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