UPDATE: Piper Sandler Upgrades The ONE Group Hospitality Inc. (STKS) to Overweight
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Piper Sandler analyst Nicole Miller Regan upgraded The ONE Group Hospitality Inc. (NASDAQ: STKS) from Neutral to Overweight with a price target of $17.00 (from $12.00).
The analyst comments "We recognize our previously too conservative view as well as the team's optimized store-level performance. Key to our view: 1) the ability to strategically maintain materially higher volumes at both concepts and 2) the ability to leverage accelerated global development opportunities. We are moving to an Overweight rating (from Neutral prior) and $17 price target (vs. $12 prior) based on ~12x (vs. ~10x prior) our FY22 EV/EBITDA estimates; this multiple translates to ~21x on a PE basis. Our investment thesis factors in a rapid industry recovery alongside a willingness (i.e. strategy) and ability (i.e. cash generation) to accelerate unit growth. While the risks we have outlined are real, they are also shorter-term in nature relative to our intended longterm investment recommendation. The potential for multiple expansion also exists as its asset-light EBITDA stream becomes fairly valued."
Shares of The ONE Group Hospitality Inc. closed at $10.37 yesterday.
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