California Pizza continues rally on outlook

California Pizza Kitchen continues climb after lifting 3rd-qtr earnings outlook

• On 3:40 pm EDT, Friday October 9, 2009

NEW YORK (AP) -- Shares of California Pizza Kitchen Inc. continued to rally on Friday, after the restaurant operator boosted its third-quarter profit outlook earlier this week.

In afternoon trading, the stock rose 76 cents, or 5 percent, to $16.09.

On Wednesday, the casual dining chain lifted its third-quarter profit outlook. The company now expects to report earnings of 22 cents to 24 cents per share for the quarter, up from prior guidance of 19 cents to 21 cents per share.

Analysts surveyed by Thomson Reuters forecast a profit of 23 cents per share for the quarter.

In a statement, the company said the revised outlook is based on operating improvements and initiatives to boost sales, such as an expanded wine program.

California Pizza Kitchen also paid down outstanding debt by an additional $13 million in the quarter.

Raymond James analyst Bryan C. Elliott on Friday, in a client note, said the stock is undervalued, given what it's trading at -- even after a recent rally.

Elliott rates the shares "Outperform" with a $16.50 price target, implying shares have room to rise 7.6 percent from Thursday's close of $15.33. So far this year, the stock has risen 43 percent.

The company said it plans to release quarterly results on Nov. 5.

Buzz up!