Markets & Finance

Citigroup Upgrades P.F. Chang's to 'Buy'

Citigroup upgraded P.F. Chang's China Bistro (PFCB) to buy from hold.

Analyst Mark Kalinowski believes the industry's solid sales trends bode well for the restaurant operator's Mar. 31 sales release. He says P.F. Chang's has undeperformed other covered restaurant names by an average of 15.5% so far in 2004, and he looks for this gap to narrow.

Kalinowski notes there's also signs that the recent adoption of a reservation-taking system is leading to improved customer satisfaction and lower host-level turnover. He says P.F. Chang's is doing very well in his Casual-Dining Wait Time Survey, earning first place in 30 of 32 monthly surveys conducted.

He tweaked the $1.36 2004 earnings per share estimate to $1.37, raised the $1.71 2005 estimate to $1.72; and upped the $54 target to $60.

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