Collins Foods: a cheap way in to the Great Aussie Dining Boom

Canaccord Genuity

Stockbroker

Collins Foods Limited is one of Australia’s largest restaurant operators, owning 171 KFC restaurants, 26 Sizzler restaurants, and 6 Snag Stand stores. The company has a proven business model that we consider highly defensive, with average same-stores sales growth of 4.8% over the last 14 years. This offers positive medium-term earnings growth, with a 3-year EPS CAGR of +9%, led by a reinvestment program of restaurant refurbishments and new restaurant openings. Management and the board retain an acquisitive stance, flagging potential acquisitions in a new retail vertical with the possibility for a domestic roll-out. We view Collins Foods as fundamentally cheap, trading at a significant discount (-50%) to its international peers and ~30% discount to its closest local listed peer, Restaurant Brands (RBD.NZ). We initiate coverage on Collins Food Group (CKF) with a BUY rating, and 12-month price target of $5.22ps (current price $3.69): You can read our initiation research in full here: (VIEW LINK)


Canaccord Genuity
Canaccord Genuity
Stockbroker
Stockbroker

Canaccord Genuity Group is a leading independent, full-service financial services firm. Canaccord Genuity has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual,...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment