Jefferies Cuts Price Target on Sonic Corp (SONC) to $32 Following 3Q Report
Jefferies reiterated a Hold rating on Sonic (NASDAQ: SONC), and cut the price target to $32.00 (from $34.00), following the company's 3Q earnings report. SONC reported SSS of 2.0%, missing the revised consensus estimate of 2.5%. SSS started the quarter up 6% in March but slowed notably into April & May due to broader sluggishness in consumer spending and some degree of negative weather impact in core markets.
Analyst Alexander Slagle commented, "F3Q SSS of 2.0% vs downwardly revised cons 2.5%, as trends weakened into Apr & May on broader slowing in consumer spending & cool, wet weather. Trends stabilized in June, but visibility very low, taking SSS outlook to 2-4% (fr 4-6%). On a positive note, Co reiterated F16 EPS, devt pipeline building nicely & Co announced plan to ramp franchise mix to 95%. That said, SSS should still be the key stock driver & lack of visibility likely keeps it under pressure."
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Shares of Sonic closed at $30.35 yesterday.