Portillo’s initiated with a Buy at Roth Capital

Roth Capital analyst JP Wollam last night initiated coverage of Portillo’s (PTLO) with a Buy rating and $9 price target The company’s 43-unit Chicagoland core business, which generates an estimated $80M of EBITDA and is worth almost $1B, is being discounted in the shares due to prior management’s national expansion missteps and macro weakness, the analyst tells investors in a research note. Roth believes Portillo’s new leadership is committed to improving unit economics, stabilizing comps, slowing unit growth, and reducing leverage. It sees these steps closing the stock’s intrinsic value gap.