NEW YORK (TheStreet) -- Shares of El Pollo Loco Holdings (LOCO) are up 3.79% to $21.65 in pre-market trading after Jefferies upgraded the company to "buy" from "hold" while lowering its price target to $27 from $30.
"While it is still early in El Pollo Loco's unit growth story, with just two locations open in Houston today, we think the current valuation underappreciates the company's multiple effective SSS drivers and the infrastructure already in place to ramp new unit development to 8%-10% over time," Jefferies said.
Houston has many demographic similarities to Southern California and Sacramento, and El Pollo Loco's brand work and "full court press" on marketing will resonate with Texans, allowing for rapid expansion in the market and potential acceleration into others, like Dallas, analysts added.
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