Wells Fargo Initiates P.F. Chang's China Bistro at Outperform (PFCB)

Wells Fargo is out with its report today on P.F. Chang's China Bistro (NASDAQ: PFCB), initiating PFCB at Outperform.

In a note to clients, Wells Fargo writes, "Initiating coverage of PFCB with an Outperform rating based on valuation and our favorable view of the company's competitive positioning in the Asian sector. We think PFCB is well positioned with its dual concept strategy, attractive price-value offering and unit economics, accelerating growth plans at Pei Wei, strong cash flow, favorable category growth trends, and global brands opportunities. Initiating EPS estimates of $2.19 for 2011 and $2.63 for 2012. Initiating valuation range of $55-57, based on a multiple of 25-26x 2011E EPS. Key risk factors that may affect valuation include same-store sales volatility, store development challenges, competitive discounting, changes in consumer spending, commodity/labor cost volatility, and food safety concerns."

Shares of PFCB closed Thursday at $45.68.