Sonic (SONC) Downgraded to “Sell” at BidaskClub

BidaskClub lowered shares of Sonic (NASDAQ:SONC) from a hold rating to a sell rating in a research note issued to investors on Saturday.

Other research analysts have also recently issued research reports about the company. Oppenheimer cut Sonic from an outperform rating to a market perform rating and set a $29.00 price objective on the stock. in a research note on Thursday, January 4th. Zacks Investment Research upgraded Sonic from a hold rating to a buy rating and set a $31.00 price objective on the stock in a research note on Wednesday, January 10th. Citigroup began coverage on Sonic in a research note on Monday, September 18th. They set a buy rating and a $28.00 price objective on the stock. Cowen restated a neutral rating on shares of Sonic in a research note on Tuesday, October 17th. Finally, UBS Group restated a neutral rating and set a $28.00 price objective (up previously from $26.00) on shares of Sonic in a research note on Friday, January 5th. Two investment analysts have rated the stock with a sell rating, seven have given a hold rating and six have issued a buy rating to the company’s stock. Sonic has a consensus rating of Hold and a consensus target price of $29.36.

Shares of Sonic (NASDAQ SONC) traded down $0.53 during trading on Friday, reaching $26.34. The company had a trading volume of 854,300 shares, compared to its average volume of 1,488,233. Sonic has a 52-week low of $22.11 and a 52-week high of $30.05. The firm has a market capitalization of $1,010.00, a PE ratio of 18.04, a P/E/G ratio of 1.18 and a beta of 1.73. The company has a quick ratio of 1.81, a current ratio of 1.81 and a debt-to-equity ratio of -2.87.

Sonic (NASDAQ:SONC) last issued its earnings results on Thursday, January 4th. The restaurant operator reported $0.30 earnings per share for the quarter, beating the Zacks’ consensus estimate of $0.25 by $0.05. Sonic had a negative return on equity of 28.95% and a net margin of 13.68%. The firm had revenue of $105.40 million for the quarter, compared to analysts’ expectations of $106.86 million. During the same quarter last year, the firm earned $0.24 earnings per share. The firm’s revenue for the quarter was down 18.7% compared to the same quarter last year. analysts predict that Sonic will post 1.52 EPS for the current fiscal year.

Sonic declared that its board has approved a stock buyback program on Thursday, October 26th that allows the company to repurchase $160.00 million in outstanding shares. This repurchase authorization allows the restaurant operator to reacquire up to 14.9% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company’s board believes its stock is undervalued.

The firm also recently declared a quarterly dividend, which will be paid on Friday, February 16th. Investors of record on Wednesday, February 7th will be paid a $0.16 dividend. This represents a $0.64 annualized dividend and a dividend yield of 2.43%. Sonic’s dividend payout ratio (DPR) is 43.84%.

In related news, Director Federico F. Pena sold 1,161 shares of the business’s stock in a transaction dated Monday, October 23rd. The stock was sold at an average price of $25.20, for a total value of $29,257.20. Following the completion of the sale, the director now directly owns 1,187,659 shares of the company’s stock, valued at $29,929,006.80. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, Director Frank E. Richardson III sold 3,670 shares of the business’s stock in a transaction dated Monday, December 18th. The shares were sold at an average price of $28.21, for a total value of $103,530.70. Following the completion of the sale, the director now directly owns 1,061,699 shares of the company’s stock, valued at $29,950,528.79. The disclosure for this sale can be found here. In the last quarter, insiders sold 167,587 shares of company stock worth $4,537,647. Insiders own 8.28% of the company’s stock.

Institutional investors have recently made changes to their positions in the stock. Riverhead Capital Management LLC increased its holdings in Sonic by 77.7% in the second quarter. Riverhead Capital Management LLC now owns 4,797 shares of the restaurant operator’s stock valued at $127,000 after buying an additional 2,097 shares during the last quarter. Flinton Capital Management LLC increased its holdings in Sonic by 74.5% in the second quarter. Flinton Capital Management LLC now owns 6,290 shares of the restaurant operator’s stock valued at $167,000 after buying an additional 2,686 shares during the last quarter. Bayesian Capital Management LP bought a new stake in Sonic in the second quarter valued at about $228,000. Wolverine Trading LLC increased its holdings in Sonic by 382.4% in the third quarter. Wolverine Trading LLC now owns 9,110 shares of the restaurant operator’s stock valued at $232,000 after buying an additional 12,336 shares during the last quarter. Finally, Piedmont Investment Advisors LLC bought a new stake in Sonic in the second quarter valued at about $244,000.

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Sonic Company Profile

Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board.

Analyst Recommendations for Sonic (NASDAQ:SONC)

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