Truist has adjusted its price target for El Pollo Loco (LOCO, Financial), reducing it from $13 to $11 while maintaining a Hold rating on the stock. The adjustment comes as a response to the company's recent performance, where comparable sales turned negative in the first quarter and continued into April. This downturn is attributed to broader economic challenges, particularly affecting the restaurant's primary Hispanic and lower-income customer base, according to the firm's analyst.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for El Pollo Loco Holdings Inc (LOCO, Financial) is $14.75 with a high estimate of $18.00 and a low estimate of $11.00. The average target implies an upside of 64.84% from the current price of $8.95. More detailed estimate data can be found on the El Pollo Loco Holdings Inc (LOCO) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, El Pollo Loco Holdings Inc's (LOCO, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for El Pollo Loco Holdings Inc (LOCO, Financial) in one year is $13.06, suggesting a upside of 45.95% from the current price of $8.948. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the El Pollo Loco Holdings Inc (LOCO) Summary page.
LOCO Key Business Developments
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- El Pollo Loco Holdings Inc (LOCO, Financial) reported a 2.6% increase in total revenue for Q1 2025 compared to the same period in 2024.
- The company successfully launched Mango Habanero Fire Grilled Chicken, which drove trial from new guests and showcased the potential of menu innovation.
- El Pollo Loco Holdings Inc (LOCO) opened two new restaurants in Q1 and plans to open at least 10 more in 2025, indicating growth in their restaurant footprint.
- The company is focusing on improving customer experience through investments in operations and a new customer feedback system.
- El Pollo Loco Holdings Inc (LOCO) is optimistic about its brand relaunch and menu innovations, including new products like fresco wraps and quesadillas, which are expected to drive growth in the latter half of the year.
Negative Points
- The company reported a decrease in restaurant contribution margin to 16% from 17.6% in the previous year, primarily due to labor inflation and higher operating costs.
- Comparable restaurant sales decreased by 1.3% for franchise-operated restaurants, indicating challenges in maintaining sales momentum.
- El Pollo Loco Holdings Inc (LOCO) experienced a 3.8% decrease in transactions, despite an increase in average check size.
- The company faced headwinds from consumer pullback and macroeconomic uncertainties, impacting sales performance.
- Weather conditions in Southern California negatively affected sales, particularly during lunch hours, contributing to softer performance in March.
