Broker snap: Restaurant Group downgraded to 'hold'

11th May 2011 12:56

After strong share price run, Restaurant Group's shares are now trading close to Peel Hunt's target price of 339p, who issues the stock with a 'hold' rating, from 'buy'.Also, weaker like-for-like sales (currently at +0.5%, down from the +3% reported in first nine weeks) were also a factor in the decision for the downgrade, the broker said.However, management said it remains on target to meet expectations, and thus Peel Hunt sees no reason to revise its estimates at this stage.Nevertheless, the group's Frankie & Benny's and Chiquito chains operate largely through cinema sites - 62% and 88% of estate at cinema locations, respectively - and have been affected by a significant decline in cinema footfall.The broker said that UK weekend box office is down more than 30% over the last nine weeks.---BC