Market Overview

SunTrust Went To Popeyes' Analyst Day; Here's What Happened

  • Analysts at SunTrust Robinson Humphrey recently attended Popeyes Louisiana Kitchen Inc (NASDAQ: PLKI)’s 2015 Analyst Day.
  • After the event, analyst Jake Bartlett reiterated a Neutral rating and $62.00 price target on the stock.
  • Shares of Popeyes are up more than 1.2 percent on Wednesday trading.

At the 2015 Analyst Day, Popeyes’ management shared an update on ongoing initiatives (like the restaurant general manager training program, which could eventually have a significant impact on sales) and presented a tech infrastructure overhaul plan, to be fully implemented over the next three to five years. However, it did not announce any changes in the company’s strategy, such as an acceleration in international growth or "a near term credit event that could have served as a catalyst to the stock,” Bartlett explains in a report issued Tuesday.

Having said this, the expert points out a two other potential catalysts for the company:

1)   An international joint venture announcement -- only when the right partner comes along. In the meantime, Popeyes is “helping to drive int'l brand awareness, SSS and, consequently, unit growth by investing in TV marketing (supplementing franchisee ad spending). Additional int'l SSS drivers are the introduction of delivery and a greater focus on regional product development, using the same process that has been successful in the US.”

2)   “The pace of incremental debt, but timing is difficult to predict.”

Meanwhile, however, he notes that the management team continues to deliver great execution, which should support robust same store sales growth and unit growth relative to other quick service restaurant operators.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for PLKI

Nov 2016DowngradesBuyHold
Aug 2016MaintainsBuy
Aug 2016DowngradesBuyHold

View More Analyst Ratings for PLKI
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Posted-In: Analyst Color Long Ideas News Price Target Reiteration Events Analyst Ratings Trading Ideas


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