UPDATE: Deutsche Bank Initiates Coverage on The Pantry with Hold Rating, $13 PT on Little Downside, Remaining Challenges

In a report published Thursday, Deutsche Bank analyst Karen Short initiated coverage on

with a Hold rating and $13.00 price target. In the report, Deutsche Bank “We are initiating coverage of PTRY with a Hold rating and a $13 price target. Our PT values the stock at an NTM EV/EBITDA of 4.4x and a P/E of 14.9x. Our rationale: 1) ROIC has been declining for years; 2) valuation peaked at the ROIC high, so although valuation initially contracted, the multiple has more or less held steady for the last few years despite continued deterioration in ROIC; 3) therefore, the relative valuation multiple has expanded; and 4) PTRY continues to lose share based on traffic and miles-driven data. We see limited downside to the stock, however, given the washed-out valuation, so could become more positive if we believed ROIC had bottomed.” The Pantry closed on Wednesday at $11.65.