El Pollo Loco Price a Little Loco According to Morgan Stanley

Shares of El Pollo Loco

are trading lower in the pre-market. This morning, Morgan Stanley analyst Jake Bartlett came out after the quiet period expiration and initiated LOCO at an underweight with a 22 price target. Mr. Bartlett feels LOCO is richly priced for its growth and that current valuation understates the risks. He makes three different cases for the stock price, highlighted below: Pollo en Fuego: Bull Case-38 price target For our bull case to unfold, LOCO would have to outperform our expectations on all measures, giving investors confidence in upside to initial growth targets while continuing to out-comp competitors. Pollo Bueno: Base Case-22 price target Our base case assumes steady execution of the unit growth plan while maintaining healthy (low-to-midsingle) digit comps in the near term. Pollo Muertos: Bear Case-13 price target Lower-than-expected volumes in new markets like Houston and sharply decelerating comps would signal more limited expansion opportunities, driving sharp multiple contraction. Shares of El Pollo Loco are currently trading at 31.50, down 5 percent from yesterday's close.