Investing.com -- Stifel upgraded Portillo's Inc (NASDAQ:PTLO) to Buy from Hold on company’s renewed focus on addressing traffic challenges and its potential for improved performance. Brokerage noted efforts to reverse weak traffic trends, adding the company indicated “willingness to promote value more aggressively if needed.”
Portillo’s long-term growth prospects include strong new store performance and significant unit expansion potential. Stifel also noted the company’s ability to deliver on reduced buildout costs and achieve average unit volumes that historically support attractive returns.
Additionally, Stifel pointed to increased board engagement and the recent appointment of Jack Hartung as positive developments. These factors, combined with management’s proactive measures, will have a boost on the stock, leading to the upgraded rating and a higher 12-month target price.
“We remain confident in new store performance and the long runway for unit growth, with the company set to deliver on reduced buildout costs over multiple years and new unit AUVs that have historically exceeded the levels required to deliver attractive returns,” analyst said.
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