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- Guggenheim Securities analyst Gregory Francfort upgraded Portillo’s Inc PTLO to Buy from Neutral at an increased price target of $25 from $22.
- The analyst believes the company will see improvement in 2023 with outlet openings in Florida, Texas, Arizona and the primary market of Chicago, despite continued labor headwinds.
- PTLO’s Q1 2023 revenues of $156.1 million marginally missed the consensus, with an EPS loss of $(0.01), missing the consensus of $0.02.
- Francfort raised the 2023 adjusted EBITDA estimate to $101 million (3%-4% above consensus) from $97 million and expects EPS of $0.27.
- The analyst expects a 90 bps y/y expansion in margins, with a pricing increase of 8% expected to weigh on mid-single-digit commodity inflation in 2023.
- Francfort sees lower-than-expected average unit volumes and less brand traction in new outlets, along with labor and staffing shortages across the industry, as risks.
- Price Action: PTLO shares are trading higher by 0.91% at $20.65 on the last check Friday.
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