BTIG lowers Del Taco Restaurants (TACO -10.8%) to a Neutral rating from Buy after sizing up the restaurant chain's Q3 report.
"The $1 Chicken Quesadilla Snacker did not resonate with consumers," updates BTIG on the Del Taco quarter. The quesadilla item landed on Del Taco's menu in late June.
BTIG also pointed to the negative traffic trend at Del Taco, the impact on margins of higher labor costs and the risks associated with price hikes.
"While optimistic that greater focus on mid-tier and premium promotions and delivery could help stem the transaction decline, we are concerned that heightened pricing could further discourage consumers," observes the BTIG research team.
Shares of Del Taco sunk straight to a 52-week low of $9.46 on the open.
Previously: Del Taco Restaurants beats by $0.01, misses on revenue (Oct. 16)
Previously: Comp sales miss at Del Taco (Oct. 16)
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