Sonic Corp. (SONC) Upgraded to “Hold” at Zacks Investment Research
Zacks Investment Research upgraded shares of Sonic Corp. (NASDAQ:SONC) from a sell rating to a hold rating in a report issued on Friday morning.
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 equities analysts have also issued reports on the stock. Citigroup Inc. initiated coverage on shares of Sonic Corp. in a report on Monday, September 18th. They issued a buy rating and a $28.00 price target on the stock. Piper Jaffray Companies reaffirmed a buy rating and issued a $32.00 price target on shares of Sonic Corp. in a report on Wednesday, July 26th. Oppenheimer Holdings, Inc. reaffirmed a buy rating and issued a $29.00 price target on shares of Sonic Corp. in a report on Friday, October 6th. BidaskClub lowered shares of Sonic Corp. from a sell rating to a strong sell rating in a report on Thursday, July 27th. Finally, Jefferies Group LLC reaffirmed a hold rating and issued a $26.00 price target on shares of Sonic Corp. in a report on Thursday, July 27th. Three equities research analysts have rated the stock with a sell rating, eight have issued a hold rating and five have issued a buy rating to the stock. The company currently has a consensus rating of Hold and a consensus target price of $27.73.
Sonic Corp. (SONC) traded down $0.51 during midday trading on Friday, reaching $24.95. 779,090 shares of the company’s stock traded hands, compared to its average volume of 1,045,595. The company has a quick ratio of 2.05, a current ratio of 1.52 and a debt-to-equity ratio of -3.19. Sonic Corp. has a fifty-two week low of $22.11 and a fifty-two week high of $30.05. The stock has a market capitalization of $1,004.24, a price-to-earnings ratio of 19.65, a P/E/G ratio of 1.27 and a beta of 1.75.
Sonic Corp. (NASDAQ:SONC) last released its quarterly earnings results on Monday, October 16th. The restaurant operator reported $0.45 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.43 by $0.02. Sonic Corp. had a net margin of 13.34% and a negative return on equity of 33.92%. The business had revenue of $123.60 million for the quarter, compared to analyst estimates of $126.01 million. During the same period in the previous year, the company earned $0.45 earnings per share. The business’s revenue for the quarter was down 23.8% on a year-over-year basis. analysts forecast that Sonic Corp. will post 1.34 EPS for the current year.
The firm also recently announced a quarterly dividend, which will be paid on Friday, November 17th. Investors of record on Wednesday, November 8th will be given a dividend of $0.16 per share. The ex-dividend date is Tuesday, November 7th. This is an increase from Sonic Corp.’s previous quarterly dividend of $0.14. This represents a $0.64 dividend on an annualized basis and a yield of 2.57%. Sonic Corp.’s payout ratio is currently 38.10%.
Sonic Corp. declared that its board has initiated a share repurchase plan on Wednesday, August 9th that allows the company to buyback $160.00 million in shares. This buyback authorization allows the restaurant operator to repurchase up to 16.2% of its stock through open market purchases. Stock buyback plans are typically a sign that the company’s board of directors believes its stock is undervalued.
In related news, Director Frank E. Richardson III sold 50,000 shares of the business’s stock in a transaction on Thursday, October 26th. The shares were sold at an average price of $25.59, for a total transaction of $1,279,500.00. Following the completion of the transaction, the director now directly owns 1,187,659 shares in the company, valued at $30,392,193.81. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Federico F. Pena sold 1,161 shares of the business’s stock in a transaction on Monday, October 23rd. The shares were sold at an average price of $25.20, for a total transaction of $29,257.20. Following the transaction, the director now owns 1,187,659 shares of the company’s stock, valued at $29,929,006.80. The disclosure for this sale can be found here. Insiders own 6.24% of the company’s stock.
Several institutional investors have recently modified their holdings of SONC. BlackRock Inc. raised its position in shares of Sonic Corp. by 121,423.6% in the first quarter. BlackRock Inc. now owns 5,323,947 shares of the restaurant operator’s stock worth $135,015,000 after acquiring an additional 5,319,566 shares during the period. Westfield Capital Management Co. LP acquired a new position in shares of Sonic Corp. in the second quarter worth about $27,984,000. Morgan Stanley raised its position in shares of Sonic Corp. by 310.9% in the first quarter. Morgan Stanley now owns 866,118 shares of the restaurant operator’s stock worth $21,965,000 after acquiring an additional 655,352 shares during the period. UBS Asset Management Americas Inc. raised its position in shares of Sonic Corp. by 3,507.8% in the second quarter. UBS Asset Management Americas Inc. now owns 420,125 shares of the restaurant operator’s stock worth $11,129,000 after acquiring an additional 408,480 shares during the period. Finally, Marshall Wace North America L.P. raised its position in shares of Sonic Corp. by 643.8% in the second quarter. Marshall Wace North America L.P. now owns 181,237 shares of the restaurant operator’s stock worth $4,712,000 after acquiring an additional 156,872 shares during the period.
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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