PTLO - Portillo's tracks higher after Guggenheim points to attractive entry point

2023-05-05 11:41:59 ET

Portillo's Inc. ( NASDAQ: PTLO ) gained in mid-day trading on Friday to recapture some of the ground lost since it posted an unexpected Q1 loss.

Sentiment on the restaurant stock got a boost after Guggenheim lifted its rating to Buy from Neutral.

Analyst Gregory Francfort and team think 2023 will prove to be a year of getting back on track for Portillo's ( PTLO ) due to the pivot towards openings in Florida, Arizona, Texas, and the core market of Chicago to alleviate growth worries. The firm also models for 90 basis points of margin improvement with the 8% full year pricing increase seen outpacing mid-single digit commodity inflation.

"We think that PTLO share price softness on earnings coupled with our upward EBITDA revisions post-1Q23 (aided by recent pricing actions) should support an opportunity for stock outperformance."

Guggenheim assigned a price target of $25 to the Chicago-based restaurant operator.

More on Portillo's:

• Portillo's Has A Runway For Growth, But Can It Provide Return To The Common Shareholder?
• Read more breakdowns on Portillo's from Seeking Alpha analysts
• Check out a recap of the earnings report
• View the growth metrics
• See the financial and valuation comparisons to sector peers
• Dig into the Seeking Alpha Quant Rating

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