Aussie fast food chain Guzman y Gomez 'attractive', says Morgan Stanley

Guzman y Gomez

08/08/2024 03:37

** Morgan Stanley initiates coverage of Australian fast food
chain Guzman y Gomez  GYG.AX  with an "overweight" rating on
"attractive" growth potential
    ** Brokerage's price target is A$31.80; GYG last trading
0.4% higher at A$28.94
    ** GYG, a Mexican-inspired quick-service restaurant, has a
"unique offering", ability to scale, and strong performance
across a diverse footprint, MS says
    ** "GYG has a long runway for growth, supported by network
expansion and an above-sector average SSS (same-store sales)
trajectory - MS
    ** Says GYG's short and medium-term store roll-out targets
(adding 40 stores per year within 5 years) are "realistic and
achievable, and could even be exceeded"
    ** Brokerage forecasts above-industry SSS growth" citing
product appeal and network expansion, others
    ** Expects FY24 revenue to jump 31% from the prior fiscal to
A$364 mln ($238.02 mln)
    ** GYG, which debuted on the ASX in late June, is down ~3%
since then


($1 = 1.5293 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))