Sonic Corp. (SONC) Cut to “Sell” at Zacks Investment Research
Zacks Investment Research downgraded shares of Sonic Corp. (NASDAQ:SONC) from a hold rating to a sell rating in a research note issued to investors on Thursday.
According to Zacks, “Sonic Corp. operates and franchises one of the largest chain of drive-in restaurants in the United States. Sonic restaurants offer made-to-order hamburgers and other sandwiches and feature Sonic signature items, such as footlong coney cheese dogs, hand-battered onion rings, tater tots, specialty soft drinks, including cherry limeades and slushes, and frozen desserts. At a typical Sonic restaurant, a customer drives into one of 24 to 36 covered drive-in spaces, orders through an intercom, and has the food delivered by a carhop within an average of four minutes. “
Several other brokerages also recently weighed in on SONC. BidaskClub downgraded Sonic Corp. from a hold rating to a sell rating in a report on Sunday, July 16th. Bank of America Corporation reiterated a buy rating and issued a $30.00 price target on shares of Sonic Corp. in a report on Monday, August 14th. Piper Jaffray Companies reiterated a buy rating and issued a $32.00 price target on shares of Sonic Corp. in a report on Wednesday, July 26th. Jefferies Group LLC reiterated a hold rating and issued a $26.00 price target on shares of Sonic Corp. in a report on Thursday, July 27th. Finally, Cowen and Company increased their price target on Sonic Corp. from $23.00 to $25.00 and gave the stock a market perform rating in a report on Friday, June 23rd. Four research analysts have rated the stock with a sell rating, nine have given a hold rating and four have given a buy rating to the stock. The company currently has an average rating of Hold and an average target price of $27.75.
Shares of Sonic Corp. (SONC) opened at 23.82 on Thursday. The company has a 50-day moving average price of $24.44 and a 200 day moving average price of $26.00. Sonic Corp. has a one year low of $21.12 and a one year high of $30.05. The company has a market capitalization of $995.89 million, a PE ratio of 15.88 and a beta of 1.74.
Sonic Corp. (NASDAQ:SONC) last issued its quarterly earnings results on Thursday, June 22nd. The restaurant operator reported $0.43 earnings per share for the quarter, topping the consensus estimate of $0.41 by $0.02. Sonic Corp. had a negative return on equity of 44.21% and a net margin of 13.23%. The firm had revenue of $124 million for the quarter, compared to the consensus estimate of $122.58 million. During the same period in the prior year, the business posted $0.43 earnings per share. The company’s revenue for the quarter was down 24.9% on a year-over-year basis. Equities analysts anticipate that Sonic Corp. will post $1.24 EPS for the current year.
Sonic Corp. declared that its Board of Directors has initiated a stock repurchase program on Wednesday, August 9th that permits the company to repurchase $160.00 million in outstanding shares. This repurchase authorization permits the restaurant operator to buy up to 16.2% of its shares through open market purchases. Shares repurchase programs are typically an indication that the company’s leadership believes its shares are undervalued.
The company also recently disclosed a quarterly dividend, which was paid on Friday, August 18th. Investors of record on Wednesday, August 9th were paid a $0.14 dividend. The ex-dividend date was Monday, August 7th. This represents a $0.56 annualized dividend and a yield of 2.35%. Sonic Corp.’s dividend payout ratio (DPR) is currently 37.33%.
In other news, Director Steven A. Davis acquired 2,000 shares of the company’s stock in a transaction that occurred on Friday, July 21st. The shares were bought at an average price of $24.62 per share, with a total value of $49,240.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. 6.24% of the stock is owned by corporate insiders.
A number of hedge funds have recently made changes to their positions in SONC. Teachers Advisors LLC boosted its stake in shares of Sonic Corp. by 25.7% in the fourth quarter. Teachers Advisors LLC now owns 121,742 shares of the restaurant operator’s stock valued at $3,227,000 after buying an additional 24,896 shares during the period. Geneva Advisors LLC boosted its stake in shares of Sonic Corp. by 6.8% in the first quarter. Geneva Advisors LLC now owns 40,392 shares of the restaurant operator’s stock valued at $1,024,000 after buying an additional 2,580 shares during the period. OLD National Bancorp IN bought a new stake in shares of Sonic Corp. during the first quarter valued at about $380,000. LSV Asset Management bought a new stake in shares of Sonic Corp. during the first quarter valued at about $218,000. Finally, Reinhart Partners Inc. boosted its stake in shares of Sonic Corp. by 2.9% in the first quarter. Reinhart Partners Inc. now owns 70,930 shares of the restaurant operator’s stock valued at $1,799,000 after buying an additional 2,010 shares during the period. 97.48% of the stock is currently owned by institutional investors and hedge funds.
About Sonic Corp.
Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board.
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