UPDATE: Miller Tabak Raises PT on Cracker Barrel Following Management Meetings
In a report published Friday, Miller Tabak analyst Stephen Anderson reiterated a Hold rating on Cracker Barrel (NASDAQ: CBRL), and raised the price target from $98.00 to $100.00.
In the report, Miller Tabak noted, “We maintain our Hold rating on Cracker Barrel (CBRL) and raise our fair value estimate to $100 (from $98) following our meetings with management yesterday. Management said food costs appear to be peaking, and with costs for soft commodities such as corn and wheat now running below year-ago levels, we now anticipate a somewhat more pronounced improvement on the food cost line in FY14 and FY15, and this is the reason for the increase in our fair value estimate. The company also expressed confidence that the company will continue to build on its recent sales and market share gains, as well as on its efficiency initiatives on which cost savings are running ahead of schedule. Management appeared comfortable with its current debt load after exiting its swap facility recently, and even with increased dividend and capital needs ahead, we see no reason for the company to take on additional debt at this time. Although we argue CBRL's sustained above-peer comp growth and accelerated market share warrant a multiple target above its historical average, we are reluctant to add to positions given the 47% year-to-date jump in CBRL shares, and thus would await a pullback.”
Cracker Barrel closed on Thursday at $94.92.
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