UPDATE: Wunderlich Securities Reiterates On Sonic Following Strong Q3 SSS

In a report published Tuesday, Wunderlich Securities analyst Robert M. Derrington reiterated a Buy rating on

, and raised the price target from $25.00 to $26.00. In the report, Wunderlich Securities noted, “Last night, Sonic (SONC) reported solid Q3F14 (May) results as EPS increased 15% to $0.30 vs. our $0.30/Street $0.29. The results reflect stronger than projected total revenue and SSS, offset by slightly weaker op. margins reflecting some commodity pressures. Based on confidence in its plan, we project sales to accelerate through FY15 as the company rolls out its sales-driving technology initiatives and ongoing menu innovation. "Combined with its margin-building programs, we believe management has its unique drive-in franchise model poised to outperform most slower-growing fast food peers. Recently trading at a discount to its peers on CY14 EV/EBITDA (11.5x vs. 12.4x) and factoring a multiple more in line with its peer avg., we are raising our PT to $26 from $25 and reit. our Buy rating.” Sonic Corporation closed on Monday at $22.65.