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UPDATE: ISI Group Upgrades Monro Muffler Brake to Buy on Growth Outlook

Related MNRO
Monro Muffler Brake Earnings Summary
Earnings Scheduled For May 22, 2014

ISI Group upgraded Monro Muffler Brake (NASDAQ: MNRO) from Neutral to Buy and raised the price target from $35.00 to $42.00.

ISI Group noted, "We are upgrading MNRO to Buy as 60 years of history suggest the end of a 2yr U.S. tire deferral cycle is near, while M&A accretion and Chinese tire tariff reductions prime the pump for 30%+ EPS growth in FY14. Comps and margins have eroded 5.5% and 300bps respectively YTD, crimping earnings and keeping MNRO in the penalty box. That said, we believe comp pressures are more cyclical (weather/ tire deferral) than secular (shrinking sweet spot of 4-12 yr old vehicles). With $0.15-$0.20 of EPS accretion attainable for 2014 (15% EPS growth), and a ~$0.15 EPS tailwind from tire/ oil sourcing savings, we see upside to $42 in our Base Case."

Monro Muffler Brake closed at $37.25 on Friday.

Posted-In: ISI GroupAnalyst Color Upgrades Analyst Ratings

 

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