UPDATE: Citigroup Reiterates Buy Rating, Raises PT on Burger King Worldwide Following 2Q EPS Report

In a report published Thursday, Citigroup analyst Alvin C. Concepcion reiterated a Buy rating on Burger King Worldwide BKW, and raised the price target from $22.00 to $23.00. In the report, Citigroup noted, “BKW reported 2Q EPS of 21c (18c GAAP) vs. FC of 19c on sales of $278mm vs. FC est. of $321mm. Global SSS were +0.6% vs. FC of -0.1% and -1.4% in 1Q. CRM were flat at 11.6% vs. flat YOY in 1Q. BKW US/Canada posted SSS of -0.5% vs. FC of -1.1% and -3% in 1Q due to tough prior yr compares, challenging macro, and heightened competitive activity. Value focused promos, such as the $1.29 Whopper Jr, 50c specials, premium LTOs, and Summer BBQ menu drove traffic in the Q. The results were inline w/ our checks of 0 to -1% in 2Q. Mgmt mentioned performance in July was consistent w/ what they saw in 2Q, and the co should benefit from easier comparisons in 3Q/4Q. Also, they haven't seen a significant change in the competitive environment, nor have they seen a significant impact from recent labor strikes (though it's early). This is encouraging, given our checks indicated the first 2 weeks of July were running down 2-4%; implying an improvement as the month progressed. CRM contracted 290bps vs. down 320bps YOY in 1Q. Mgmt mentioned franchisee profitability also continued to increase.” Burger King Worldwide closed on Wednesday at $19.19.