PF Chang's China Bistro initiated with "neutral"

09/11/03 - J.P. Morgan Securities

NEW YORK, September 11 (New Ratings) – Analysts at JP Morgan initiate coverage of PF Chang’s China Bistro (PFCB) with a "neutral" rating.

Shares of PF Chang’s China Bistro, the owner and operator of Bistro restaurants that provide Chinese cuisine in the US, are currently trading at $48.05.

According to JP Morgan’s research note, PF Chang’s China Bistro and Pei Wei Asian Diner are leaders in the fragmented Asian restaurant market and have a strong presence in the casual dining segment. The analysts expect the company to improve its market share on account of trends favoring high consumer demand for high quality ethnic food.

The analysts are impressed by the company’s efficient management of numerous market operations. JP Morgan expects the Bistro to grow to 200 units without substantial risks. Although the company’s stock can be an investment option for long term investors on account of visible high growth rate, the short term upside potential of the stock is limited, the analysts believe.

The EPS estimates for 2003 and 2004 are $1.07 and $1.33, respectively. The P/E estimates for 2003 and 2004 are 44.9x and 36.1x, respectively.

JP Morgan initiates coverage of PF Chang’s China Bistro with a "neutral" rating.