Wall Street analysts expect smooth CEO transition for Toast (TOST)

Toast (NYSE: TOST) was upgraded to Buy from Neutral at UBS on Wednesday, with analyst Rayna Kumar raising the price target to $30 from $25 per share.

Kumar told investors in a note that they see improved potential for quarterly net new location adds and margin expansion for the company.

In addition, "Toast remains well-positioned to capture the restaurant industry's ongoing shift from legacy technology to omnichannel, integrated software solutions," wrote Kumar.

"While the competitive environment remains intense and macro uncertainty looms, Toast continues to prove itself as a top provider, evidenced by the recent acceleration of location net adds," the analyst added.

Kumar also noted that they see limited risk from the appointment of Aman Narang as Toast's new CEO, "given his strategic leadership roles at Toast."

In a note from BofA on Wednesday, analyst Jason Kupferberg also said they expect the transition to be smooth.

"While we don’t believe this transition was broadly anticipated, it should be quite smooth," said Kupferberg, who has a Buy rating and a $27 price target on the stock. "Overall, we would not expect the new CEO to make significant changes to Toast’s strategy, which he was heavily involved in architecting."

By Sam Boughedda

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