7 Reasons Wedbush Is Still Eating Popeyes

In a report published Thursday, Wedbush Morgan analyst Nick Setyan maintained an Outperform rating on Popeyes Louisiana Kitchen, Inc. PLKI, with a price target of $70. The company reported its fourth quarter EPS in-line with the consensus on preannounced SSS growth of 10.8% at domestic franchised and 6.9% at co-owned restaurants. In the report, Wedbush Morgan noted, "We expect upward EPS revisions to conservative guidance as 2015 progresses, driven by SSS growth and leverage ahead of expectations. We also believe unit growth reacceleration in 2016 could render long-term EPS guidance of 13%-15% conservative." "International reflection point could result in international unit growth acceleration…we believe that the learnings from these more mature markets set up a potential reflection point for sales growth in other less mature markets over the next 3 years," Setyan commented "While we believe leverage will gradually increase from the expected $40-50M in 2015 (up from $40M in 2014), we also expect increased investment in company-owned international growth," the analyst added. The EPS estimate for 2015 was reduced from $1.93 to $1.90, "to reflect guidance."