Guggenheim Starts Jersey Mike's Subs (JMKE) at Buy

Guggenheim analyst Gregory Francfort initiates coverage on Jersey Mike's Subs (NYSE: JMKE) with a Buy rating and a price target of $28.00.

The analyst comments "Key Message: We are initiating coverage of Jersey Mike’s Subs Inc. with a Buy rating and $28 price target. JMKE is a capital efficient, fully franchised unit growth compounder posting +LSD% SSS. We believe the brand has the potential to go from 3,300 units in the U.S. today to 7,500+ with additional runway in int'l markets (supported by Subway’s >15K current overseas footprint). JMKE shares trade for 20x adj. EV/EBITDA, a ~25-30% premium to MCD and YUM. But we believe >8% long-term unit growth, +LSD% SSS and +LDD% EBITDA CAGR should support closer to a mid-20x multiple. And that could prove conservative if long-term initiatives around digital marketing, loyalty, and off-prem kick in faster than we expect and take medium-term SSS from +LSD% to +MSD%."

For an analyst ratings summary and ratings history on Jersey Mike's Subs click here. For more ratings news on Jersey Mike's Subs click here.

Shares of Jersey Mike's Subs closed at $23.86 yesterday.

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