On Monday, Americana Restaurants International PLC (6015:TADAWUL) received a new stock rating from an analyst at Jefferies, who initiated coverage with an Underperform rating and set a price target of SAR1.90.
The analyst highlighted the company's leading position as the number one quick-service restaurant (QSR) operator in the Middle East, North Africa, and Kazakhstan. Despite Americana's significant market opportunity in a region where the QSR segment is largely underpenetrated, Jefferies cites several concerns.
The firm pointed out that while the addressable market for Americana exceeds USD 80 billion, there are three major headwinds expected to persist in the medium term. These challenges could lead to further consensus earnings per share (EPS) reductions. The analyst's projections for the company's 2025-2026 estimated EPS are 12-19% lower than the current consensus.
Americana's stock is trading at roughly 24 times the estimated 2025 earnings, which Jefferies considers high, especially during off-peak times when the stock price is approximately 50% off its peak values. Given these factors, the firm finds the risk-reward balance for Americana's shares to be unattractive at the present time.
The Underperform rating suggests that the analyst expects the company's stock performance to lag behind that of other companies in the sector or the broader market. The price target of SAR1.90 also indicates a level at which the analyst believes the stock should be valued based on their assessment of the company's prospects and market conditions.
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