It's now almost three weeks since Guzman y Gomez Ltd (ASX: GYG) shares joined the ASX boards.
Guzman debuted on the ASX at $22 back at its ASX IPO on 20 June but quickly shot up to $30 each. No doubt that delighted early participants in the IPO and quickly established GYG shares as a formidable ASX force.
But ever since Guzman shares' first day on the public markets, it has mostly been downhill for investors, with a bit of volatility sprinkled in.
At the close on Wednesday, GYG shares were going for $27.80 apiece. That's still a good 26.3% above the company's IPO price but down almost 8% from the highs we saw upon the company's ASX entry.
Despite this descent from $30, it's still hard to call Guzman's ASX IPO anything but a roaring success for the company.
GYG stock: Buy or sell?
But now that Guzman has settled into ASX life and the hype from its IPO has died down a little, it's a great time to see what ASX brokers think of this new kid on the ASX block.
After all, it's a good opportunity to get a grip on Guzman's fundamentals and see what the experts reckon now that we've all had a chance to analyse this company post-IPO.
To begin, let's look at the views of ASX broker Morgans.
As my Fool colleague James covered earlier this month, Morgans initiated its coverage of GYG shares by issuing an 'add' rating alongside a 12-month share price target of $30.80.
This broker sees strong long-term growth in Guzman's future and believes that the company's plan to reach 1,000 restaurants in Australia is doable if it succeeds in executing its plan to open 30-30 stores annually.
Morgans has also set a long-term share price target of $62 for GYG. That is based on an assumption that the company will be able to successfully expand into the American market.
But Morgans isn't the only broker eyeing off Guzman y Gomez shares after their IPO. As reported by the Australian Financial Review this week, Wilsons is another broker seeing success in this company's future.
Another ASX broker says buy on Guzman y Gomez shares
Wilsons has reportedly given Guzman shares an 'outperform' rating, with a 12-month share price target of $31.98. If realised, Guzman would gain almost 15% from the current share price.
The broker acknowledged that this share price target was ambitious but argued it was still achievable thanks to Guzman's unique opportunity to capitalise on Australians' growing appetite for Mexican-themed food.
Here's some of what Wilsons' head of research, James Ferrier, had to say on this bullish position on Guzman shares:
The market opportunity in Australia for a Mexican-inspired quick service restaurant offering has enthused us for some time… GyG has established a domestic store network with very attractive unit economics and sufficient scale to support expectations of a significant and successful full store rollout.
Wilsons is also pencilling in a same-store sales growth rate of 4.5% annually until 2030, along with increasing margins from each restaurant.
Foolish takeaway
No doubt, ASX investors who have already bought into Guzman shares or are even considering a buy will take a lot of comfort from the views of these two ASX brokers.
But brokers aren't always on the money. Only time will tell if GYG can pull off its ambitious growth plans and justify these experts' bullishness.
