UPDATE: Jefferies Initiates Coverage on AFC Enterprises on Meaningful Growth Story

In a report published Tuesday, Jefferies analyst Alexander Slagle initiated coverage on AFC Enterprises (NASDAQ: AFCE) with a Buy rating and $47.00 price target.

In the report, Jefferies noted, AFC is one of the most appealing growth stories in the industry, with significant unit growth potential (2x in U.S.), strong SSS (avg 6.2% last 2 yrs) & a powerful franchised business (98% of system) that drives operating margins of 28% & EPS growth in the mid-teens. We think the stock is attractive on recent pullback related to fears about slower SSS trends in the category and investors are overlooking the longer-term visibility & growth potential.”

AFC Enterprises closed on Monday at $40.53.