BMO Capital Markets initiated coverage on Noodles & Co NDLS in a report issued Thursday with a Outperform rating and $25 price target.
Analyst Andrew Strelzik believed that Noodles & Co "should not only reaccelerate earnings growth ahead of its 25 percent long-term target and exceed consensus expectations in 2015 and 2016, but also generate long-term EPS growth ahead of the target."
Strelzik thought that "over the long term...Noodles is well positioned for sustainable 15 percent+ and 25 percent+ sales and EPS growth given ample "white space" for new stores, comparable restaurant sales growth above its 2.5-3.0 percent target, and the greatest long-term margin expansion opportunity in fast casual."
The price target implied a 46-47x P/E multiple on the firm’s 2015 estimates "that is above its current forward 12-month P/E (39x-40x) and the current fast casual average (38x-39x), but well below NDLS’s historical average (67x-68x)."
Noodles & Co recently traded at $20.29, up 2.37 percent.
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