Australia's Guzman y Gomez rises; Morgan Stanley sees volume and margin growth

Guzman y Gomez

29/01/2025 03:01

** Shares of Australia's Guzman y Gomez  GYG.AX  rise 0.44%
to A$39.645
    ** Stock gains as much as 2.3% to A$40.36 earlier in the day
    ** Analysts at Morgan Stanley expect same-store-sales growth
to be the likely area of upside for the quick-service restaurant
chain at its 1H25 results
    ** Sees GYG's 1H25 same-store-sales to grow by 7.5%,
compared with prospectus forecast of 4.8%, reflecting higher
volumes
    ** Brokerage expects margins at GYG to benefit from both
operational leverage and higher volumes
    ** Sees operational leverage to be driven by volume growth,
providing a significant tailwind to margins and profitability
over the next three to five years
    ** Says GYG is an early stage QSR operator with a long
runway for growth, supported by network expansion and an
above-industry average same-store-sales trajectory
    ** MS has "overweight" rating on stock and a PT of A$38.5
    ** Stock has lost 2.3%, YTD

    

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))