UBS Group Lowers Sonic (SONC) to Market Perform

Sonic (NASDAQ:SONC) was downgraded by equities research analysts at UBS Group from an “outperform” rating to a “market perform” rating in a research report issued to clients and investors on Thursday, The Fly reports.

A number of other analysts have also recently weighed in on SONC. Zacks Investment Research raised shares of Sonic from a “hold” rating to a “buy” rating and set a $28.00 price objective on the stock in a report on Thursday, September 28th. Oppenheimer reaffirmed a “buy” rating and issued a $29.00 price objective on shares of Sonic in a report on Tuesday, October 17th. Cowen reaffirmed a “neutral” rating on shares of Sonic in a report on Tuesday, October 17th. Guggenheim reissued a “buy” rating and set a $31.00 target price (up previously from $29.00) on shares of Sonic in a research note on Thursday, December 28th. Finally, BidaskClub raised shares of Sonic from a “sell” rating to a “hold” rating in a research note on Saturday, December 2nd. One investment analyst has rated the stock with a sell rating, seven have issued a hold rating and six have issued a buy rating to the stock. The company presently has an average rating of “Hold” and an average price target of $28.33.

Sonic (NASDAQ SONC) opened at $27.67 on Thursday. The company has a debt-to-equity ratio of -3.19, a current ratio of 1.52 and a quick ratio of 1.48. Sonic has a 52-week low of $22.11 and a 52-week high of $30.05. The stock has a market cap of $1,061.10, a PE ratio of 18.82, a PEG ratio of 1.39 and a beta of 1.74.

Sonic (NASDAQ:SONC) last posted its quarterly earnings results on Monday, October 16th. The restaurant operator reported $0.45 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.43 by $0.02. Sonic had a net margin of 13.34% and a negative return on equity of 33.92%. The company had revenue of $123.60 million for the quarter, compared to the consensus estimate of $126.01 million. During the same period last year, the firm posted $0.45 EPS. The company’s revenue for the quarter was down 23.8% on a year-over-year basis. research analysts anticipate that Sonic will post 1.34 earnings per share for the current year.

Sonic declared that its Board of Directors has initiated a stock buyback program on Thursday, October 26th that allows the company to repurchase $160.00 million in outstanding shares. This repurchase authorization allows the restaurant operator to buy up to 14.9% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company’s board of directors believes its stock is undervalued.

In other Sonic news, Director Frank E. Richardson III sold 50,000 shares of the firm’s stock in a transaction dated Thursday, October 26th. The shares were sold at an average price of $25.59, for a total value 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 sale was disclosed in a filing with the SEC, which is accessible through this link. Also, VP Carolyn C. Cummins sold 2,347 shares of the firm’s stock in a transaction dated Thursday, November 30th. The stock was sold at an average price of $25.43, for a total transaction of $59,684.21. The disclosure for this sale can be found here. Insiders sold a total of 167,587 shares of company stock worth $4,537,647 in the last ninety days. Corporate insiders own 6.24% of the company’s stock.

Several hedge funds have recently bought and sold shares of the stock. Aperio Group LLC boosted its holdings in shares of Sonic by 0.5% during the third quarter. Aperio Group LLC now owns 10,608 shares of the restaurant operator’s stock worth $278,000 after purchasing an additional 55 shares during the period. PineBridge Investments L.P. boosted its holdings in shares of Sonic by 2.6% during the second quarter. PineBridge Investments L.P. now owns 6,157 shares of the restaurant operator’s stock worth $166,000 after purchasing an additional 155 shares during the period. Municipal Employees Retirement System of Michigan boosted its holdings in shares of Sonic by 1.5% during the third quarter. Municipal Employees Retirement System of Michigan now owns 10,780 shares of the restaurant operator’s stock worth $282,000 after purchasing an additional 160 shares during the period. BNP Paribas Arbitrage SA boosted its holdings in shares of Sonic by 1.4% during the first quarter. BNP Paribas Arbitrage SA now owns 15,327 shares of the restaurant operator’s stock worth $389,000 after purchasing an additional 213 shares during the period. Finally, Cardinal Capital Management boosted its holdings in shares of Sonic by 1.6% during the first quarter. Cardinal Capital Management now owns 17,448 shares of the restaurant operator’s stock worth $442,000 after purchasing an additional 274 shares during the period.

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About Sonic

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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