UPDATE: Morgan Stanley Upgrades El Pollo LoCo On Valuation

In a report published Wednesday, Morgan Stanley analyst John Glass upgraded the rating on

from Underweight to Equal-Weight, and raised the price target from $23.00 to $25.00. In the report, Morgan Stanley noted, “Upgrading LOCO to EW on valuation. While we have always been proponents of LOCO as a strong regional brand with sound expansion plans, valuation kept us cautious as the post IPO valuation made shares the most expensive even of its highest growth peers. Now at 39x our '15 EPS estimate, the shares are trading at only a 6% premium to peers such as FRGI,vs. 130% during the post-IPO peak,as increased float (not fundamental concerns) normalizes valuation.” El Pollo Loco closed on Tuesday at $25.65.