KeyBanc Starts Bojangles' (BOJA) at Overweight

KeyBanc initiated coverage on Bojangles' (NASDAQ: BOJA) with an Overweight rating and a price target of $32.00. Analyst Christopher O'Cull noted the brand's cult-like following in the Southeast, and he thinks the stock deserves a premium valuation.

"We believe BOJA is poised to grow annual revenue at least 10-12% and accelerate earnings growth—averaging 15-17% in 2016-2018. Our rating is based on our opinion a premium valuation is warranted by the Company’s long-term growth prospects, potential upward bias to near-term estimates and high free cash flow conversion," said O'Cull.

"Within its current 10-state footprint, the Company has the potential for as many as 1,400 units (45% penetrated). Over the last two years, unit growth has accelerated to 7.5% annually (vs. 4.7% in 2011). We are projecting annual net unit growth to approximate 8% through 2018, with growth in adjacent markets representing 80% of unit growth (vs. 60-65% projected in 2015)," added the analyst.

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

Shares of Bojangles' closed at $28.01 yesterday.

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