UPDATE: KeyBanc Initiates Hold on Chuy's Holdings; Waiting for Pullback

KeyBanc initiated its coverage on Chuy's Holdings

with a Hold rating, reflecting reservations on the shares' current price level. KeyBanc noted, "Chuy's is the fastest-growing, publicly-traded restaurant company with 22% + revenue growth anticipated for the next five years, fueled by best-in-class new unit returns (30-35% cash-on-cash, including pre-opening expense, and 23% fullycapitalized). Since its IPO in July, shares have appreciated 35% and are currently valued at 34x NTM EPS and 13x NTM EBITDA. We believe fair value is in the $18-$20 range, and under the KBCM rating system the expected return merits a HOLD rating. We would consider becoming more constructive on a pullback unrelated to a slowdown in unit growth or new store sales performance; ideally, investors over-reacting to a SRS disappointment would create a nice entry-point." Chuy's Holdings closed at $17.53 on Friday.