Wunderlich Reiterates on Sonic

In a report published Tuesday, Wunderlich Securities analyst Robert Derrington reiterated a Buy rating on Sonic (NASDAQ: SONC), raising its price target from $22.00 to $23.00.

According to the report, last night after market close, SONC reported solid Q1F14 results including slightly better revenues and sys-SSS (2.2%), yielding an 18% increase in EPS ex-items to $0.13, in line with the analysts and street estimates. The price target changed is based on their revised higher FY15 projections.

“Based on our confidence in management's plan to sustain EPS growth at a 14-20% annual rate and supported by our revised higher FY2015 projections, we reiterate our Buy rating on SONC, reflecting its better-than-most-peers SSS, its strong defensive franchise business model, its attractive valuation and expanding free cash flow,” the report said. “Recently trading at a discount to its slower-growing peers on cal. 2015 EV/EBITDA (9.5x vs. 10.9x) and based on our revised 2015 projections, we are lifting our PT on SONC to $23.00 from $22.00.”

Some highlights from the report included:

-Strong FY2014 start. -SSS and margins projected to climb. -Reaffirms FY14 guidance.

SONC closed Monday at $19.25 with shares trading down at 2.38 percent.