Sonic Corp. shares jumped Wednesday after a William Blair analyst upgraded her rating on the drive-in restaurant chain's stock.
Analyst Sharon Zackfia said in a research note that she has more confidence after meeting with the company management team in the company's ability to sustain earnings per share growth of 15 percent to 20 percent on low single-digit increases in sales at outlets open for at least a year. She upgraded her rating on the stock to "Outperform".
Sonic's new point of sale and supply chain management systems should help improve restaurant margins over the next two years, the analyst said. The new systems cost roughly $120,000 per location but are expected to ultimately lower expenses and improve the customer experience with faster, more accurate orders.
Shares of Sonic jumped 83 cents, or 4.2 percent, to $20.52 in afternoon trading amid a broader market dip. Sonic shares are up nearly 90 percent so far this year.