Morningstar unimpressed by Australia's Guzman y Gomez share buyback

Guzman y Gomez

09/10/2025 19:46

** Morningstar notes Guzman y Gomez's GYG.AX A$100 million ($65.49 million) stock buyback with share price trading over A$26

** Investment research firm highlights how the Mexican-themed fast food chain issued shares at A$22 per share 15 months ago; says selling low and buying high does not create shareholder value

** Flags no impact on fair value estimate from buyback, maintains at A$16 per share

** Co's shares saw biggest ever intraday pct jump on Thursday following buyback and results release, but still closed 2.3% lower at A$26.39

** Q1 network sales grew by 19% compared with last year, sales growth tracking to Morningstar's full year estimates

** Morningstar provides caution on expensive shares, which are trading 100 times next year's earnings

** 9 analysts on avg rated 'buy' on GYG shares; median PT set at A$30.60, as per LSEG-compiled data

($1 = 1.5270 Australian dollars)

 (Reporting by Nichiket Sunil in Bengaluru)

 ((Nichiket.Sunil@thomsonreuters.com))