Roth Capital Ups Checkers Drive-In to 'Buy'

Analyst Anton Brenner says strong sales momentum and margin improvement should lift earnings in 2003

Roth Capital upgraded Checkers Drive-In Restaurants (CHKR ) to buy from neutral.

Analyst Anton Brenner raised the 76 cents 2003 earnings per share estimate to $1.00, reflecting strong sales momentum and margin improvement in the first half of the year. He notes although pre-tax income is estimated to increase 24% in 2004, he estimates earnings per share will decline to 80 cents, as Checkers accrues an income tax expense, however, cash flow should not be affected.

Brenner expects effective marketing, reductions in drive-thru times, and training and incentive programs may sustain same-store sales increases of 3% to 3.5% through 2004. With the appointment a of new CEO, Checkers should be more communicative with investors. Brenner set a $16 12-month target.

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