Portillos 'Beefed Up' Focus To Improve Traffic Trends, Says Bullish Analyst

Italian beef, burgers, and salads company Portillos Inc PTLO has intensified its efforts to improve traffic trends, according to Stifel.

The Portillos Analyst: Analyst Chris O’Cull upgraded the rating for Portillos from Hold to Buy, while raising the price target from $13 to $16.

The Portillos Thesis: A recent meeting with the company's management indicated a "clearer alignment" to increase traffic from several avenues, including the launch of a loyalty program and higher marketing investments, as well as "a willingness to promote the brand’s value proposition more aggressively if necessary," O’Cull said in the upgrade note.

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"With ordering kiosks now fully rolled out to the system, work continues around optimizing the consumer interface and capturing efficiency unlocks," the analyst wrote.

The new loyalty program could offer the potential to expand the share of "known customer transactions, providing more opportunities to drive behavior with targeted messaging and offers over time," he added.

"We also believe the board has become more engaged, and we are encouraged by the recent appointment of Jack Hartung," O’Cull wrote. Portillos could achieve healthy new store performance and has a "long runway for unit growth," he further stated.

Price Action: Shares of Portillos had risen by 7.25% to $13.40 at the time of publication on Monday.

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