Market Overview

Maxim Urges Investors To Start A New Habit

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Maxim Urges Investors To Start A New Habit

Some habits can’t be broken — even amid competitive threats from McDonald’s Corporation (NYSE: MCD) or Shake Shack Inc (NYSE: SHAK).

Habit Restaurant Inc (NASDAQ: HABT) earned the endorsement of Maxim Wednesday in light of potential changes to the fast-casual burger chain climate.

The Rating

Analyst Stephen Anderson initiated coverage of Habit with a Buy rating and $13 price target.

The Thesis

Maxim has “cautious optimism” that Habit will stabilize comps in 2018 after three years of competition-driven deceleration, Anderson said. (See Anderson's track record here.) 

The firm’s focus on value deals and convenience, including drive-thru units and online sales, are seen to improve same store performance amid “a shakeout among fast casual burger peers.”

At the same time, anticipated expansion into lower-cost markets across the Rockies and Southeast could drive mid-teen revenue growth, and lower meat costs and a stall in wage inflation could widen margins, the analyst said. 

Habit could also profit from proposed government activity, according to Maxim. 

“We estimate passage of corporate tax reform at the federal level could boost EPS by as much as 25 percent,” Anderson said. 

Price Action

At the time of publication, shares were trading up 2.7 percentn at $10.06. 

Related Links:

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Photo courtesy of Habit Restaurants. 

Latest Ratings for HABT

DateFirmActionFromTo
Aug 2019MaintainsOutperform
Oct 2018MaintainsBuyBuy
Aug 2018DowngradesBuyHold

View More Analyst Ratings for HABT
View the Latest Analyst Ratings

Posted-In: Maxim restaurants Stephen AndersonAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

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Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
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