Guggenheim Grows More Bullish on Chicken

Wingstop has vastly outperformed El Pollo LoCo on the charts

Oct 3, 2018 at 10:25 AM
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Brokerage firm Guggenheim is upping its outlook on restaurant stocks Wingstop Inc (NASDAQ:WING) and El Pollo LoCo Holdings, Inc. (NASDAQ:LOCO). Below is a  closer look at the bullish attention on WING and LOCO shares.

For WING, the analyst in coverage upgraded their rating to "buy" from "neutral" and set an $80 price target -- well above the Sept. 7 record peak of $70.74. Meanwhile, SunTrust Robinson got in on the action by hiking its price target to $72 from $62. In response, the security is trading 3.9% higher at $67.55.

This outperformance is more of the same from the equity, which has more than doubled over the past 12 months. In fact, Wingstop enjoyed a major post-earnings bull gap back in early August, and has continued to grind higher since. Considering this, it wouldn't be surprising to see more analysts jump to the side of the bulls, since almost half of those in coverage still have "hold" or "sell" ratings.

Turning to LOCO, Guggenheim lifted its price target to $17 from $14, and the stock is up 4.3% at $12.61 as a result. The shares needed the good news to stop their recent downtrend that's been in place since the Sept. 6 high of $14.40, and today's gains have them testing their 50-day moving average. This trendline has been in a strong level of support since May.

There are plenty of bears surrounding El Pollo LoCo stock, too. Three-fourths of the brokerage firms tracking the stock have just "hold" ratings in place, and 9.2% of the float is held by short sellers.

 

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