An analyst downgraded Tim Hortons Inc. late Thursday, saying few catalysts will likely emerge in the near term to boost the coffee chain's stock.
Goldman Sachs analyst Steven T. Kron cut his rating on the Canadian company to "Sell" from "Neutral" and cut his price target to $30 from $34.
The new target implies he expects shares to rise about 1 percent over Thursday's $29.65 close.
"A more visible path to U.S. profitability needs to emerge to justify a premium multiple," Kron said in a note to clients. "We think this is unlikely to materialize near term."
While margin improvements may happen in the short term, rising costs for materials will likely make margins hard to sustain, he said.
The stock has dipped about 20 percent so far this year.
A company representative was not immediately available for comment.
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