Australian (ASX) Stock Market Forum

GYG - Guzman y Gomez

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peter2 said:
Best short of the year, now $25 and falling.
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My bottom drawer is seemingly allergic to pseudo-Mexican food, as am I.

Though my fundamental analysis skills are rudimentary at best, I have an involuntary gag reflex is I peruse the same.

As with anyone who has tasted real Mexican food, one should quickly figure out these people are fakers. The corollary of which is that anyone who believes this is Mexican food will fall for any b******* in their prospectus.
 
We all know what's going to happen next. The GYG mgt team will squeeze the margins of the franchisees. Franchisees will revolt and stores will close. Shares will hit $5, before GYG says sorry. Private equity will buy GYG and it'll disappear from the ASX.
 
i saw restaurants/fast food , a struggling economy ( rising food costs ) and thought outside my risk tolerance

maybe later , but it will have to steal some serious market share from somebody

i can't guarantee it will be a wreck but goodness me there are challenges coming for the whole sector

BTW are these places ( liquor ) licensed , if so snatching up a boutique brewer/winery to use as 'exclusive beverages' ,might change the game
 
peter2 said:
We all know what's going to happen next. The GYG mgt team will squeeze the margins of the franchisees. Franchisees will revolt and stores will close. Shares will hit $5, before GYG says sorry. Private equity will buy GYG and it'll disappear from the ASX.
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Repost when it inevitably happens. I give it one reporting season.
 
divs4ever said:
i saw restaurants/fast food , a struggling economy ( rising food costs ) and thought outside my risk tolerance

maybe later , but it will have to steal some serious market share from somebody

i can't guarantee it will be a wreck but goodness me there are challenges coming for the whole sector

BTW are these places ( liquor ) licensed , if so snatching up a boutique brewer/winery to use as 'exclusive beverages' ,might change the gam
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I'm going long on anxiety medication and or zombie drugs (xylazine). :laugh:
 
How can the valuations be so wide apart? $15 Morningstar, or $60 Morgans? huh?? I wonder if Morgans was in the IPO?

Whatever the case, there's still massive growth factored into the GYG SP. Like that of a startup AI unicorn. But, this is nachos and margaritas FFS.


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Domino’s shareholders have endured a rough few years with the company’s share price falling from highs of $160 in 2021 to last trading at $35. A research note from Barrenjoey put falling profit expectations down to three issues: slower store rollout, weak Japanese yen against the Australian dollar, and rising cheese prices all putting pressure on Domino’s earnings outlook. Consumer analyst Tom Kierath slashed his price target to $43 from $51 but still believes things will improve.

“Cheese prices are up nearly ~40 per cent since the end of March 2024 which means that respite for DMP/franchisees might be short-lived,” he said. “The basket of DMP’s commodity inputs is now back at the highest level since November 2022.”

Collins Foods, which operates over 250 KFC outlets, is also having a tough time, flagging subdued sales as its eaters pull back on spending amid the cost-of-living crisis.

Barrenjoey – the investment bank that shepherded Guzman y Gomez to the ASX – is yet to initiate on the fast-food chain. We can only imagine the pressure on Kierath to come at it from the most favourable standpoint.

Morgans eyes $62​

Guzman y Gomez does have its supporters, all the way to a whopping $60-plus a share.

Morgans initiated on Guzman y Gomez with a $30.80 target price on Wednesday and laid out a bull case to take the stock to $62. He reckons the chain deserves its earnings premium, backing its “significant long-term growth potential” and arguing multiples look “much more reasonable” when compared to high-growth US quick service restaurants like Chipotle and Wing Stop.

“To justify the current share price of GYG (or, indeed, to see upside to it), you have to believe that the long-term growth story is not just possible, but likely,” analyst Billy Boulton said.

“GYG trades at a premium multiple compared to other QSR companies listed on the ASX. But these companies are neither expected to have an organic growth profile anywhere near that of GYG and nor do they own their own brands.”

Morgan’s base case assumes Guzman y Gomez can build its Australian network to 1000 stores over the next 20 years from a network of 185 today – in other words, an enormous growth target with no margin for error. To put that into perspective, McDonald’s has about 1000 stores, and it has been here since 1971. Its bull case assumes significant growth in its overseas markets with 500 US stores by FY45.

GYG has pulled back 14 per cent since its strong debut but is still trading above the $22 listing price.
 
My
Sean K said:
How can the valuations be so wide apart? $15 Morningstar, or $60 Morgans? huh?? I wonder if Morgans was in the IPO?

Whatever the case, there's still massive growth factored into the GYG SP. Like that of a startup AI unicorn. But, this is nachos and margaritas FFS.


View attachment 179870

Domino’s shareholders have endured a rough few years with the company’s share price falling from highs of $160 in 2021 to last trading at $35. A research note from Barrenjoey put falling profit expectations down to three issues: slower store rollout, weak Japanese yen against the Australian dollar, and rising cheese prices all putting pressure on Domino’s earnings outlook. Consumer analyst Tom Kierath slashed his price target to $43 from $51 but still believes things will improve.

“Cheese prices are up nearly ~40 per cent since the end of March 2024 which means that respite for DMP/franchisees might be short-lived,” he said. “The basket of DMP’s commodity inputs is now back at the highest level since November 2022.”

Collins Foods, which operates over 250 KFC outlets, is also having a tough time, flagging subdued sales as its eaters pull back on spending amid the cost-of-living crisis.

Barrenjoey – the investment bank that shepherded Guzman y Gomez to the ASX – is yet to initiate on the fast-food chain. We can only imagine the pressure on Kierath to come at it from the most favourable standpoint.

Morgans eyes $62​

Guzman y Gomez does have its supporters, all the way to a whopping $60-plus a share.

Morgans initiated on Guzman y Gomez with a $30.80 target price on Wednesday and laid out a bull case to take the stock to $62. He reckons the chain deserves its earnings premium, backing its “significant long-term growth potential” and arguing multiples look “much more reasonable” when compared to high-growth US quick service restaurants like Chipotle and Wing Stop.

“To justify the current share price of GYG (or, indeed, to see upside to it), you have to believe that the long-term growth story is not just possible, but likely,” analyst Billy Boulton said.

“GYG trades at a premium multiple compared to other QSR companies listed on the ASX. But these companies are neither expected to have an organic growth profile anywhere near that of GYG and nor do they own their own brands.”

Morgan’s base case assumes Guzman y Gomez can build its Australian network to 1000 stores over the next 20 years from a network of 185 today – in other words, an enormous growth target with no margin for error. To put that into perspective, McDonald’s has about 1000 stores, and it has been here since 1971. Its bull case assumes significant growth in its overseas markets with 500 US stores by FY45.

GYG has pulled back 14 per cent since its strong debut but is still trading above the $22 listing price.
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My favourite Goldwienism- "Include me out".
 
Sean K said:

Morgans eyes $62​

Guzman y Gomez does have its supporters, all the way to a whopping $60-plus a share.

Morgans initiated on Guzman y Gomez with a $30.80 target price on Wednesday and laid out a bull case to take the stock to $62. He reckons the chain deserves its earnings premium, backing its “significant long-term growth potential” and arguing multiples look “much more reasonable” when compared to high-growth US quick service restaurants like Chipotle and Wing Stop.

“To justify the current share price of GYG (or, indeed, to see upside to it), you have to believe that the long-term growth story is not just possible, but likely,” analyst Billy Boulton said.

“GYG trades at a premium multiple compared to other QSR companies listed on the ASX. But these companies are neither expected to have an organic growth profile anywhere near that of GYG and nor do they own their own brands.”

Morgan’s base case assumes Guzman y Gomez can build its Australian network to 1000 stores over the next 20 years from a network of 185 today – in other words, an enormous growth target with no margin for error. To put that into perspective, McDonald’s has about 1000 stores, and it has been here since 1971. Its bull case assumes significant growth in its overseas markets with 500 US stores by FY45.

GYG has pulled back 14 per cent since its strong debut but is still trading above the $22 listing price.
Click to expand...
I am no expert on the QSR sector but comparing GYG to Chipotle is fairyland stuff. To compare an Australian outlet to a large American one prospectively which has enjoyed impressive growth, more than doubling in price in two years is fanciful. The recent price action shows that with Chipotle probable highs reached and selling commencing Chipotle may consolidate or fall in price. Furthermore the American economy may not be the best in which to invest with panic over interest rate stasis and inflation always a possibility.

"Investing" in GYG is fraught with danger and Morgan clients may very well pay the price in more ways than one. There should be a law against this type of spruiking. Or maybe there is?

On the other hand Morgans may be correct. Do they use darts?

gg
 
I noticed recently that NAB was discreetly promoting GYG internally to NAB customers via rewards or discounts.

I realised then, that with such big forces at play, the share price would probably go up, despite what I had previously thought.
Vested interests etc

And here we are.

I've only eaten it once when interstate with family and it wasn't particularly memorable.

Screenshot_20240909-101621.png
 
frugal.rock said:
I noticed recently that NAB was discreetly promoting GYG internally to NAB customers via rewards or discounts.

I realised then, that with such big forces at play, the share price would probably go up, despite what I had previously thought.
Vested interests etc

And here we are.

I've only eaten it once when interstate with family and it wasn't particularly memorable.

View attachment 183950
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It is very hard to invest currently looking at fundamentals, except for gold and in a twisted way copper
 
Sean K said:
This thing was supposed to tank.

I'm eating hats.

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We are heading towards 2 3 years of inflationary black tulip exuberance
Could double and i would not be surprised.
The real issue is how to make sure to jump out first
Valid for the whole market IMHO
I sold half long term portfolio early September, and may probably pay 20% more mid october on reentry...i can eat my beret😂
 
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