Collins Foods' FY20 result beat expectations by about 6%, despite the pandemic which, as per Morgans, shows resilience.

The broker notes growth in all brands in the first seven weeks of the first half of FY21, with KFC Australia's same-store sales (SSS) growing 11.6% while Taco Bell has almost reached pre-covid levels. KFC Europe recorded negative SSS growth.

Morgans expects the company to focus on the higher returning KFC Australia segment and approves of this strategy.

FY21 operating income is forecasted at $129m with earnings growing by circa 3-5% across FY21-23.

Morgans maintains its Add rating with the target price increasing to $10.23 from $8.17.

Sector: Consumer Services.

Target price is $10.23.Current Price is $9.42. Difference: $0.81 - (brackets indicate current price is over target). If CKF meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2020 Acquisdata Pty Ltd., source FN Arena