Update (9:46 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- UBS raised its target price on Burger King Worldwide (BKW) to $30 and set a "buy" rating. The firm noted that the fast food company's unit growth is settling around 5% globally.
The stock was falling 1.13% to $25.46 shortly after the market opened on Friday.
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Separately, TheStreet Ratings team rates BURGER KING WORLDWIDE INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BURGER KING WORLDWIDE INC (BKW) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 850.00% and other important driving factors, this stock has surged by 47.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although BKW had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- BURGER KING WORLDWIDE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BURGER KING WORLDWIDE INC increased its bottom line by earning $0.34 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.34).
- The revenue fell significantly faster than the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 39.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The debt-to-equity ratio is very high at 2.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, BKW has managed to keep a strong quick ratio of 2.42, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: BKW Ratings Report