Update (9:40 a.m.): Updated with Wednesday market open information.
NEW YORK (TheStreet) -- Jefferies initiated coverage on Susser Petroleum Partners (SUSS) with a "hold" rating and a $72 target price. The firm cited valuation, a positive foodservice story and 4-5% store growth as the reasons for its rating.
The stock was flat at 9:33 a.m. on Wednesday.
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Separately, TheStreet Ratings team rates SUSSER HOLDINGS CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUSSER HOLDINGS CORP (SUSS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, SUSS's share price has jumped by 39.38%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- SUSSER HOLDINGS CORP's earnings per share declined by 44.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SUSSER HOLDINGS CORP reported lower earnings of $0.65 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $0.65).
- SUSS's debt-to-equity ratio of 0.90 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SUSS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, SUSSER HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SUSS Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.