Wells Fargo Cuts Susser (SUSS) to Market Perform Due to Competitive Environment in Texas
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Price: $82.46 --0%
Rating Summary:
2 Buy, 8 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 9 | New: 13
Rating Summary:
2 Buy, 8 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 9 | New: 13
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Wells Fargo downgraded Susser Holdings Corporation (NYSE: SUSS) from Outperform to Market Perform with a price target of $68-$70 (from $69-$71).
"The Texas economy is booming and as such, competition among retailers has increased. Based on our analysis, there is more retail square footage with fuel and more promotional activity for key merchandise categories recently to drive traffic highlighting the heightened competitive environment in Texas. Given SUSS and CST's (NYSE: CST) exposure in Texas, we are lowering our merchandise and fuel margin ests since we believe both c-stores have been forced to remain competitive to retain share," said analyst Bonnie Herzog.
"Therefore, we are lowering our EPS ests for SUSS in FY2014 by $0.27 to $2.48 and in FY2015 by $0.32 to $3.40 based on its over-exposure to Texas. While we continue to believe in the long-term story of SUSS, and believe the strength of its Laredo Taco Company will support earnings over time, given the near-term pressure we expect to remain through the peak summer selling season, we are reluctantly downgrading SUSS to Market Perform from Outperform and lowering
our valuation range by $1 to $68-70. We are also lowering our EPS ests for CST in FY2014 by $0.04 to $2.01 and maintain our Market Perform rating," she added.
For an analyst ratings summary and ratings history on Susser Holdings Corporation click here. For more ratings news on Susser Holdings Corporation click here.
Shares of Susser Holdings Corporation closed at $65.32 yesterday.
"The Texas economy is booming and as such, competition among retailers has increased. Based on our analysis, there is more retail square footage with fuel and more promotional activity for key merchandise categories recently to drive traffic highlighting the heightened competitive environment in Texas. Given SUSS and CST's (NYSE: CST) exposure in Texas, we are lowering our merchandise and fuel margin ests since we believe both c-stores have been forced to remain competitive to retain share," said analyst Bonnie Herzog.
"Therefore, we are lowering our EPS ests for SUSS in FY2014 by $0.27 to $2.48 and in FY2015 by $0.32 to $3.40 based on its over-exposure to Texas. While we continue to believe in the long-term story of SUSS, and believe the strength of its Laredo Taco Company will support earnings over time, given the near-term pressure we expect to remain through the peak summer selling season, we are reluctantly downgrading SUSS to Market Perform from Outperform and lowering
our valuation range by $1 to $68-70. We are also lowering our EPS ests for CST in FY2014 by $0.04 to $2.01 and maintain our Market Perform rating," she added.
For an analyst ratings summary and ratings history on Susser Holdings Corporation click here. For more ratings news on Susser Holdings Corporation click here.
Shares of Susser Holdings Corporation closed at $65.32 yesterday.
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