Broker snap: Tuck into Restaurant Group, UBS says

4th Jan 2010 10:39

Following a tough Christmas in the depths of the downturn in 2008, UBS thinks that Restaurant Group, the owner of the Frankie & Bennie's and Chiquito chains, will have seen better trading over the latest festive period and has upped its rating on the company accordingly.It now has a 'buy' stance on the company, compared with 'neutral' previously and lifts its target price to 218p from 205p.It notes that the company is trading at about 11.9 times 2010 earnings, 7% below the broader sector.The broker sees Restaurant Group lifting its market share in 2010 as other operators struggle to repeat the heavy discounting seen last year, which Restaurant Group avoided.Meanwhile, while commercial real estate development activity is still low, UBS sees this changing in 2011 as more out of town leisure parks and shopping centres start to appear, offering the company further scope to open new stores.