Asia stocks: Japan, S. Korea hit record highs amid Fed easing bets; China dips
Investing.com - BofA Securities maintained its Buy rating and $14.00 price target on Portillo’s, Inc (NASDAQ:PTLO) despite the company’s reduced expansion plans. The stock, currently trading at $6.11, has fallen over 53% in the past six months and is trading near its 52-week low, according to InvestingPro data.
Portillo’s has guided fiscal 2026 unit openings to remain flat year-over-year at 8 locations, below consensus expectations of 13 and the company’s previously stated long-term algorithm of 12-15% growth, which would have implied 12-15 new units.
The restaurant chain is simplifying operations, including discontinuing its breakfast pilot program, and reducing growth capital expenditures following disappointing performance from its current class of new restaurant openings.
BofA believes these strategic shifts will allow Portillo’s to invest in traffic-growing initiatives while achieving its target for positive free cash flow in 2026.
The investment bank cited Portillo’s increased focus on free cash flow and substantial unit growth runway—estimating potential for 725 total stores versus 94 currently—as factors supporting significant long-term value creation for the company.
In other recent news, Portillo’s Inc. has adjusted its fiscal 2025 guidance, citing challenging conditions within the industry. The company now anticipates same-store sales to decline between 1% and 1.5%, a revision from its earlier forecast of 1% to 3% growth, which falls short of analyst expectations of 1.2% growth. Meanwhile, Portillo’s has appointed Denise Lauer as its new Chief Marketing Officer, effective September 22, bringing over 20 years of experience from her previous role at Marco’s Pizza. On the analyst front, William Blair has reiterated its Outperform rating for Portillo’s, highlighting the brand’s potential for geographic expansion, particularly in markets like Arizona and Florida. Stephens, however, maintained an Equal Weight rating, noting the company’s strategic reset aimed at refining its growth strategy and improving unit-level economics. These developments reflect a period of transition and adjustment for the restaurant chain.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.