El Pollo Loco Downgraded To Neutral At SunTrust Robinson Humphrey On Market Share Concerns

By Markets MarketWatch Pulse

El Pollo Loco Holdings Inc. was downgraded to neutral from buy at SunTrust Robinson Humphrey on concerns that the chicken chain will have problems luring back value-oriented customers in a promotional environment. The price target is $15. Bank analysts also believe the company is facing long-term margin headwinds due to the minimum wage increase in California. "These factors, along with missed 2015 growth targets limits our long-term unit growth estimates to 6% to 7%, below management's 8% to 10% target," SunTrust wrote in a Wednesday note. "Our downgrade is not just based on first-quarter results [due May 5], but we expect a $0.01 miss." El Pollo Loco shares are inactive in premarket trading, and down 47% for the past year. The S&P 500 is down 0.8% for the last 12 months.

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