The Globe and Mail reports in its Tuesday, Nov. 13, edition that Canaccord Genuity analyst Derek Dley downgraded Recipe Unlimited ($25.66) to "hold" from "buy" after the release of softer-than-expected quarterly results, pointing to higher overhead costs related to its acquisition of The Keg. The Globe's David Leeder writes in the Eye On Equities column that on Thursday, Recipe Unlimited, formerly Cara Operations, reported same restaurant sales growth of 1.8 per cent for the quarter, topping Mr. Dley's 1.7-per-cent projection. Earnings before interest, taxes, depreciation and amortization of $52-million missed his expectation by $9-million, due partially to $5-million in overhead costs related to The Keg. Mr. Dley trimmed his share target by $3 to $31. Analysts on average target the shares at $32.19. Mr. Dley says in a note,
"While we continue to like Recipe's long-term organic growth profile, in light of the higher-than-expected overhead costs related to the acquisition of The Keg and the correspondingly lower near-term EBITDA growth profile we believe shares are appropriately valued, at current levels." The Globe reported on March 13 that BMO Nesbitt Burns analyst Peter Sklar upgraded the shares to "outperform" from "market perform." The shares could then be had for $26.99.
© 2019 Canjex Publishing Ltd. All rights reserved.