Markets & Finance

Oppenheimer Upgrades California Pizza to 'Buy'

Oppenheimer upgraded California Pizza Kitchen (CPKI) to buy from neutral.

Analyst Michael Smith says the current price is an attractive entry point for long-term investors. He says California Pizza expects to become more communicative with investors as it solidifies its future growth plans. The near-term story should include a discussion of a build-up of general and administrative expenses as the company rebuilds infrastructure.

The restaurant operator tried to take the bulk of charges associated with underperforming units in the third quarter, and a new management team will work to ensure that the company's financial problems are behind them, Smith says. He sees steps by management to meet their target goal of 15%+ earnings per share growth becoming clearer in 2004.

Also, Smith sees 89 cents 2003 earnings per share, and 97 cents in 2004. He has a $24 target.

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