Burger King Grilled by Analysts

Burger King shares slide as analysts cut their price target on the fast food chain's stock and lower their earnings expectations.
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MIAMI (

TheStreet

) -- Shares of

Burger King Holdings

(BKC)

slid Wednesday after analysts cut their price targets on the fast food chain's stock and lowered their earnings expectations.

UBS

(UBS) - Get Report

analyst David Palmer reduced his price target on Burger King shares to $18, from $19, on concerns regarding the company's full-year costs and sales. Robert W. Baird analyst David Tarantino also cut his price target on BKC shares by $1 to $18.

On Tuesday,

Burger King posted better-than-expected fourth-quarter profits

of $49 million, or 36 cents per share, though results were sharply lower than the fourth quarter of last year.

>>Burger King Beats, Looks Abroad for Growth

While earnings topped Wall Street's expectations, Burger King's quarterly revenue came up short as global comparable same-store sales, or sales at stores open at least one year, fell 0.7%. Comps at U.S. and Canadian locations fell 1.5%.

Burger King's performance was pressured by stubbornly high rates of young, jobless males in the U.S.,

Citi

analyst Gregory R. Badishkanian said in an appearance on

CNBC

.

Palmer said Burger King's performance in fiscal 2011 "will depend largely on the net impact of the U.S. breakfast rollout." Year-over-year comparisons will be more difficult because 2010 sales were also boosted by the launch of the $1 double cheeseburger.

A roster of fast food restaurants have gotten into the breakfast game recently. Rival

McDonald's

(MCD) - Get Report

ramped up its McCafe line of coffee and smoothie beverages

in recent quarters, part of its strategy to lure market share away from coffee rival

Starbucks

(SBUX) - Get Report

.

Burger King said it plans to launch an enhanced breakfast platform this fall in U.S. and Canadian locations that will include new menu products and

Seattle's Best Coffee

.

Jack in the Box

(JACK) - Get Report

said earlier this month it expanded its breakfast menu last quarter with a grilled breakfast sandwich. Jack in the Box also rolled out a new line of coffee made with Kona coffee beans, and added a new fruit smoothie to its menu, in its recent quarter.

Palmer cut his fiscal 2011 earnings-per-share estimate for Burger King by a nickel to $1.34, while Tarantino cut his estimate by 6 cents, to $1.30. The consensus call among Wall Street analysts polled by Thomson Reuters is for Burger King to earn $1.42 per share.

Burger King shares fell 0.4% Wednesday, or 7 cents per share, to $16.83.

-- Written by Miriam Marcus Reimer in New York.

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