Barclays Starts First Watch (FWRG) at Overweight
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Barclays analyst Jeffrey Bernstein initiates coverage on First Watch (NASDAQ: FWRG) with a Overweight rating and a price target of $26.00.
The analyst commented, "We initiate coverage on FWRG with an Overweight rating & $26 price target. Based on its service platform, FWRG is a casual diner. That said, we believe it more appropriate to value FWRG based on growth pillars & (fresh) product offerings. FWRG has a pipeline for 10%+ unit growth & has consistently generated 6-8%
comp growth (with positive traffic, pre-pandemic). Unit growth is key, with strong visibility as a ~425 US system on a path to ~2,000. Its growth is based on the need to satisfy the growing breakfast & brunch daypart (often served at lunch) segment, in which peers don't compete. And with a breakfast / brunch menu, food costs are low & margins are high.FWRG is up 19% post its 10/1 IPO (~23% day one vs. S&P up ~1%), and currently at ~22x '22 EBITDA. Such leaves the stock appropriately at a premium to slower growth, traditional casual dining peers. We believe it more appropriate to value against higher growth (often fast casual) peers, with a discount warranted."
Shares of First Watch closed at $21.48 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesSanford C. Bernstein, Standard & Poor's, Barclays, IPO
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