Sonic Corp. was downgraded to hold from buy at Canaccord Genuity on increased competition from “non-traditional venues” and soft sales in recent months. Sonic’s price target was cut to $24 from $30. Shares are down 2.4% in early trading. Sonic is facing growing food and drink competition from retail channels like convenience stores. This is a long-term headwind for Sonic, Canaccord wrote in a Monday note. Same-store sales have faced challenges across the restaurant industry over recent months, and Canaccord analysts think promotions will continue, creating a sales hurdle. And Canaccord worries that Sonic hasn’t got new products on the way, instead relying on previously introduced snack items. Sonic shares are down 27.4% for the past year while the S&P 500 index is up nearly 16% for the period.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News