Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - William Blair has reiterated an Outperform rating on Portillo’s, Inc (NASDAQ:PTLO), maintaining its positive outlook on the restaurant chain. The stock, currently trading at $6.17, has fallen over 60% from its 52-week high of $15.78, with InvestingPro analysis suggesting the shares are currently undervalued.
The research firm expressed encouragement about the brand’s geographic expansion potential, specifically highlighting its portability in markets such as Arizona and Florida beyond its Midwest base.
William Blair pointed to the development of new units featuring an "E-shaped kitchen" design as a potential catalyst for improved unit-level returns, expected later in 2026 and beyond.
The firm noted that Portillo’s current enterprise value sits at approximately 9.8 times its estimated 2026 EBITDA, suggesting the stock offers value at current price levels.
William Blair acknowledged several risks facing the company, including questions about geographic expansion beyond the Midwest, high concentration of locations in Illinois, and the likelihood of restaurant-level margin contraction as the company expands throughout the United States.
In other recent news, Portillo’s Inc. announced a significant revision to its fiscal 2025 outlook, citing industry challenges. The company now anticipates a decline in same-store sales between 1% and 1.5%, a stark contrast to its earlier forecast of 1% to 3% growth, which also fell short of analyst expectations. UBS responded by lowering its price target for Portillo’s to $9.00 from $12.00, maintaining a Neutral rating due to weaker-than-expected new store sales. In line with this, Portillo’s reported lower-than-expected sales for the second quarter and adjusted its 2025 revenue and EBITDA guidance.
Additionally, Portillo’s is undergoing a strategic reset to enhance its growth strategy, as noted by Stephens, which maintained an Equal Weight rating with a $10.00 price target. As part of its strategic initiatives, the company aims to focus on core market execution and disciplined capital allocation. Furthermore, Portillo’s has appointed Denise Lauer as Chief Marketing Officer, effective September 22, bringing over 20 years of marketing experience from her previous role at Marco’s Pizza. These developments reflect Portillo’s efforts to navigate current industry headwinds and reposition its growth trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.