Craig-Hallum upgrades Carrols Restaurant to Buy, raises price target to $4

As previously reported, Craig-Hallum upgraded Carrols Restaurant to Buy from Hold with a price target of $4, up from $2.50. The firm notes Carrols delivered strong Q4 results with an impressive profitability beat despite a highly inflationary cost environment. Commodity inflation remains a headwind to start 2023 but management has executed well on controlling labor spend. Craig-Hallum notes that these headwinds appear to be moderating from 2022 levels, which saw low double digits food inflation and high single-digit labor inflation and sees potential for upside on EBITDA for the first time in almost two years.