UPDATE: Imperial Capital Downgrades Kona Grill to In-Line, Raises PT on Valuation

In a report published Tuesday, Imperial Capital analyst Lee J. Giordano downgraded the rating on

from Outperform to In-Line, but raised the price target from $11.50 to $14.00. In the report, Imperial Capital noted, “We are downgrading our rating on KONA shares to In-Line from Outperform, based on valuation, and increasing our one-year price target to $14 from $11.50. With the stock up by about 55% year-to-date, and now trading at close to 10x our 2014 EBITDA estimate, we believe further upside could be limited in the near term. Nevertheless, we believe KONA should continue to benefit from improvements to its menu, a growing pipeline of new restaurants, enhanced marketing efforts, and a favorable remodel program. With only 23 restaurants currently and a differentiated restaurant operating model with strong margins, we believe the company has a long runway of organic growth potential throughout the U.S.” Kona Grill closed on Monday at $13.48.