Sonic (SONC) Demand Steady But Reducing Price Target - Piper Jaffray

Piper Jaffray analyst, Nicole Miller Regan, recently performed a series of channel checks on Sonic (NASDAQ: SONC) that indicate that Sonic's investments in menu, marketing, and technological innovation leave the company well-positioned given the brand's ability to message a solid pipeline of menu items (recent extensions of chicken wing and hot dog platforms, in particular). Checks suggest that recent extensions to the boneless chicken wing and hot dog platforms continue to drive traffic.

Top-line expectations for the company's fiscal 1Q16 period are unchanged but, EPS estimate drops to $0.23 (vs. $0.24) on a lower estimate of fees related to last year's completed license conversions. Previously, we were modeling a continued lift in 1Q16 of what was really a one-time event in fiscal 1Q15.

Reiterate Overweight rating but reduce PT to $37 from $42 on a lower EBITDA multiple. EPS full year FY16 target remains $1.30 per share.

For an analyst ratings summary and ratings history on Sonic click here. For more ratings news on Sonic click here.

Shares of Sonic closed at $27.29 yesterday.

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