Barclays Maintains an 'Equalweight' on Sonic (SONC); 4QF11 Disappoints & F12 Visibility Limited
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Price: $43.49 --0%
Rating Summary:
4 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
4 Buy, 20 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Barclays maintains an 'Equalweight' on Sonic (NASDAQ: SONC) price target of $8.00.
Barclays analyst says, "SONC fundamentals remain highly volatile, prompting a lack of confidence in a sustainable comp improvement. And that coupled with our longer-term structural concerns keeps us cautious at current levels. 4QF11 comps were previously pre-announced below expectations, and now EPS is facing a similar scenario. Comps have been 'positive' since mid-August despite more difficult compares, though sustainability a challenge as compares only become more difficult. Longer term, we continue to believe SONC's comp and unit growth are structurally challenged, unable to return to historical sales growth and peak margins, with ompetitive convergence ongoing and franchisees cautious on growth. We remain cautious assuming a return to consistent double-digit EPS growth. SONC has underperformed year to date (-28% vs. S&P -3%), and we believe it is fairly valued...2.5x vs. the 7-19.5x three-year range and 14x average." (Cuts FY12 EPS estimate from $0.60 to $0.58)
For more ratings news on Sonic click here and for the rating history of Sonic click here.
Shares of Sonic closed at $7.32 yesterday.
Barclays analyst says, "SONC fundamentals remain highly volatile, prompting a lack of confidence in a sustainable comp improvement. And that coupled with our longer-term structural concerns keeps us cautious at current levels. 4QF11 comps were previously pre-announced below expectations, and now EPS is facing a similar scenario. Comps have been 'positive' since mid-August despite more difficult compares, though sustainability a challenge as compares only become more difficult. Longer term, we continue to believe SONC's comp and unit growth are structurally challenged, unable to return to historical sales growth and peak margins, with ompetitive convergence ongoing and franchisees cautious on growth. We remain cautious assuming a return to consistent double-digit EPS growth. SONC has underperformed year to date (-28% vs. S&P -3%), and we believe it is fairly valued...2.5x vs. the 7-19.5x three-year range and 14x average." (Cuts FY12 EPS estimate from $0.60 to $0.58)
For more ratings news on Sonic click here and for the rating history of Sonic click here.
Shares of Sonic closed at $7.32 yesterday.
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