Sonic (SONC) Raised to “Buy” at Zacks Investment Research

Zacks Investment Research upgraded shares of Sonic (NASDAQ:SONC) from a hold rating to a buy rating in a report published on Friday, September 14th. They currently have $42.00 target price on the restaurant operator’s stock.

According to Zacks, “Sonic Corp., America’s Drive-in has built a dominant position in the drive-in restaurant business. They did it by sticking to what made drive-ins so popular in the first place: made-to-order American classics, signature menu items, speedy service from friendly Carhops and heaping helpings of fun and personality. Today, Sonic is the largest chain of drive-in restaurants in America. As a business, they continue to thrive, maintaining strong real sales growth, industry-leading customer frequency and high returns for their stockholders. So take a cruise through their website to learn more about our company and the people who help make it an American success story. “

A number of other research firms also recently commented on SONC. BidaskClub downgraded Sonic from a buy rating to a hold rating in a research report on Wednesday, August 8th. Morgan Stanley boosted their target price on Sonic from $26.00 to $31.00 and gave the stock an equal weight rating in a research report on Thursday, June 28th. Guggenheim reiterated a buy rating and set a $38.00 target price on shares of Sonic in a research report on Sunday, July 1st. Canaccord Genuity reiterated a hold rating and set a $27.00 target price on shares of Sonic in a research report on Thursday, June 7th. Finally, Citigroup boosted their target price on Sonic from $32.00 to $41.00 and gave the stock a buy rating in a research report on Thursday, July 12th. Fourteen investment analysts have rated the stock with a hold rating and three have issued a buy rating to the stock. The company currently has an average rating of Hold and an average price target of $35.88.

SONC traded up $0.07 during trading on Friday, reaching $43.38. 686,600 shares of the stock were exchanged, compared to its average volume of 952,543. The company has a debt-to-equity ratio of -2.62, a quick ratio of 1.78 and a current ratio of 1.78. The company has a market cap of $1.54 billion, a price-to-earnings ratio of 34.70, a PEG ratio of 1.86 and a beta of 1.47. Sonic has a 1 year low of $23.22 and a 1 year high of $44.87.

Sonic declared that its board has approved a stock buyback plan on Thursday, July 12th that allows the company to repurchase $500.00 million in shares. This repurchase authorization allows the restaurant operator to purchase up to 39.6% of its stock through open market purchases. Stock repurchase plans are typically a sign that the company’s management believes its stock is undervalued.

In related news, VP Carolyn C. Cummins sold 2,500 shares of the company’s stock in a transaction on Monday, October 1st. The stock was sold at an average price of $43.31, for a total value of $108,275.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Christina D. Vaughan sold 2,124 shares of the company’s stock in a transaction on Tuesday, July 17th. The shares were sold at an average price of $36.00, for a total value of $76,464.00. Following the completion of the transaction, the insider now owns 2,124 shares of the company’s stock, valued at $76,464. The disclosure for this sale can be found here. Insiders sold 115,696 shares of company stock valued at $4,839,037 over the last quarter. Insiders own 8.28% of the company’s stock.

A number of institutional investors have recently added to or reduced their stakes in SONC. Flinton Capital Management LLC increased its stake in Sonic by 16.2% during the second quarter. Flinton Capital Management LLC now owns 10,744 shares of the restaurant operator’s stock worth $370,000 after acquiring an additional 1,496 shares during the last quarter. HL Financial Services LLC increased its stake in Sonic by 14.9% during the second quarter. HL Financial Services LLC now owns 11,979 shares of the restaurant operator’s stock worth $412,000 after acquiring an additional 1,553 shares during the last quarter. Legal & General Group Plc increased its stake in Sonic by 2.6% during the second quarter. Legal & General Group Plc now owns 80,035 shares of the restaurant operator’s stock worth $2,768,000 after acquiring an additional 2,024 shares during the last quarter. SG Americas Securities LLC increased its stake in Sonic by 70.9% during the first quarter. SG Americas Securities LLC now owns 6,285 shares of the restaurant operator’s stock worth $159,000 after acquiring an additional 2,608 shares during the last quarter. Finally, Royal Bank of Canada increased its stake in Sonic by 22.9% during the first quarter. Royal Bank of Canada now owns 14,354 shares of the restaurant operator’s stock worth $362,000 after acquiring an additional 2,673 shares during the last quarter.

Sonic Company Profile

Sonic Corp. operates and franchises a chain of quick-service drive-in restaurants in the United States. As of August 31, 2017, the company operated 3,593 Sonic Drive-Ins in 45 states, of which 228 were owned and operated by the company and 3,365 were owned and operated by franchisees. The company also owns and leases 135 properties; and sublease 53 properties to franchisees and other parties.

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