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NEW YORK - An analyst on Wednesday downgraded shares of CKE Restaurants Inc., which owns and operates the Carl's Jr. and Hardee's fast food chains, saying that sales are sluggish at stores open more than a year.
SunTrust Robinson Humphrey analyst Christopher O'Cull cut his rating on the stock to "Neutral" from "Buy." He said that he's not sure when sales will improve.
The company on Wednesday said sales at stores open more than a year declined 3.7 percent in its fiscal third quarter. The key performance metric declined 5.2 percent at Carl's locations and 1.8 percent at the Hardee's chain during the quarter.
O'Cull also said that the company may have a tough time improving breakfast sales, given McDonald's promotions and low prices.
"Given the weakening trend, we believe margin and earnings could fall short of Street expectations for fiscal 2011," O'Cull wrote in a note to investors.
O'Cull cut his share price target to $9 from $11, which implies shares still have room to rise 5.4 percent from Wednesday's close of $8.54.
The company is scheduled to post third-quarter results around Dec. 8.
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