Market Overview

Zoe's Kitchen's Q3 Sets The Table For A Strong 2018

Zoe's Kitchen's Q3 Sets The Table For A Strong 2018
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Zoe’s Kitchen Inc (NYSE: ZOES) soared despite missing on third-quarter sales estimates and narrowing FY17 sales guidance.

The Analyst

Jefferies’ Andy Barrish.

The Rating

Upgrade to Buy from Hold, with a $16 price target.

The Thesis

Despite a slight sales miss in the third quarter, Barrish is confident that Zoe’s top-line catalysts will drive new revenue growth.

“We like ZOES brand positioning and even in very competitive fast-casual category we believe sss can return to positive consistently beginning in ’18. We believe this will come from continued new menu innovation,” said Barrish.

A re-launched integrated mobile app/loyalty program is driving more customer engagement and the potential to drive increased awareness, according to Jefferies.

Over the long term, Barish sees Zoe’s continuing to drive high growth, with disciplined unit growth and mid-single digit comps.

“We do not expect substantial upside to our numbers, but believe the totality of Zoe’s growth opportunity should allow it to maintains a premium multiple,” concluded the analyst.

Price Action

Shares of Zoe’s closed up 13.5 percent at $12.44.

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Latest Ratings for ZOES

May 2018Maxim GroupDowngradesBuyHold
May 2018William BlairDowngradesOutperformMarket Perform
Nov 2017BairdMaintainsNeutral

View More Analyst Ratings for ZOES
View the Latest Analyst Ratings

Posted-In: Andy Barrish. JefferiesAnalyst Color Price Target Restaurants Analyst Ratings General Best of Benzinga


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