“We are extremely supportive of the LOCO ‘Company Story’ (its strong, operations-focused management team) and the LOCO ‘Concept Story,’” writes Stifel Nicolaus analyst Paul Westra.
Stifel is one of five analysts to start coverage of El Pollo LoCo LOCO as the analyst quiet period ends. Stifel has a hold rating and $30 fair value on the stock.
“We are bullish on the QSR-Plus space in general, which can offer fast-casual quality at QSR prices/speeds,” says Westra. “Chains like Chipotle teaching Americans that high-quality, dinner-centric meals can in fact be obtained at counter-service restaurants.”
Related: El Pollo LoCo Sells Off As Analysts Step In
El Pollo LoCo, specifically, benefits from a strong management team and private equity investment in operational systems.
Although Westra likes El Pollo LoCo’s growth story, he thinks the upside is already built into shares. Sifel values LoCo’s existing business at $10 per share, based on 15 times forward earnings.
Futures units are valued at $20. This figure assume El Pollo Loco can open 1,500 locations with approximately 14 percent ROE per location.
Shares of El Pollo LoCo were last trading at $31, down 6.6 percent in Tuesday's premarket trading.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
