UPDATE: ISI Group Initiates Monro Muffler Brake at Hold on Limited Near-Term Upside

ISI Group initiated coverage on Monro Muffler Brake

with a Hold rating. ISI Group noted, "Monro is a secular growth story within auto service, with cyclical headwinds putting modest risk to our 2013/2014 estimates. Monro is well positioned to more than double its store base in a highly fragmented $175bn market, with a low cost advantage given 35% direct import penetration. That said, with a 3% contraction in its 4-12 yr old vehicle “sweet spot” starting in 2013, comp recovery, and margin expansion are likely to be gradual. Trading at 17.5x our CY13 EPS of $1.85 (27% premium vs Hardlines), we see limited upside for MNRO until weather and traffic trends normalize. Monro Muffler Brake closed at $33.01 on Wednesday.