What to Expect From El Pollo Loco Earnings

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El Pollo Loco Holdings Inc. (NASDAQ: LOCO) is scheduled to report its third-quarter financial results on Thursday after the markets close. The consensus estimates from Thomson Reuters call for $0.15 in earnings per share (EPS) on $90.40 million in revenue. The same period from the previous year had $0.12 in EPS on $86.56 million in revenue.

This company had a very hot IPO in the summer of 2014 and has been absolutely crushed recently. El Pollo Loco is down massively from last November, and for aggressive accounts this company could have big upside. El Pollo Loco, which means “the crazy chicken” in Spanish, develops, franchises, licenses and operates quick-service restaurants under the El Pollo Loco name in the United States. The company offers individual and family-sized chicken meals, Mexican-inspired entrees, sides and alternative proteins.

Analysts acknowledge that the company posted a disappointing second quarter, which continued the beating the shares have taken. And while, they lower EBITDA estimates, they say the company is switching back to value, offering to increase store traffic. Trading at a cheap 12 times 2016 EBITDA estimates, and expecting 8% unit growth, the analysts believe the company will be rewarded a higher growth multiple.

A few analysts have weighed in on El Pollo Loco:

  • SunTrust initiated coverage with a Buy rating and a $17 price target.
  • Stifel upgraded it to Buy from Hold with a $17 price target.
  • Jefferies reiterated a Buy rating but lowered its target to $19 from $27.

So far in 2015, the crazy chicken has underperformed the market, with the stock down nearly 42% year to date. Over the past 52 weeks it is even worse, with the stock is down roughly 68%.

Shares of El Pollo loco were trading at $11.66 Wednesday, with a consensus analyst price target of $18.40 and a 52-week trading range of $10.16 to $35.80.

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