What is Bell Potter’s view on GYG shares after its US exit?

Guzman Y Gomez (ASX: GYG) has been making headlines after the company announced its decision to exit the US market, while lifting its Australia Segment EBITDA guidance.

As The Motley Fool’s Laura Stewart reported last week, Guzman y Gomez decided to exit the US market after its business there failed to meet key financial performance targets, despite solid work by the local team. 

According to GYG, the Board remains confident in the strength and future opportunity of its Australian business, supported by a robust pipeline of new sites.

GYG shares rocket on US withdrawal news

The market reacted positively to this decision last week, as GYG shares jumped by more than 20%. 

This marked a strong rebound after GYG shares had slumped in 2026. 

Prior to last week’s news, the share price had fallen 25% this year. 

As Kevin Gandiya reported on Sunday, investors likely saw this decision as a positive one due to the competitive US market. 

The disciplined decision may have prevented a much larger destruction of shareholder value down the track.

Brokers adjust their view on GYG shares

It’s clear from last week’s market reaction that investors saw the decision as a positive one. 

It seems brokers view it the same way. 

Following the US exit, the team at Bell Potter issued updated guidance on GYG shares. 

The broker said that although the Q3FY26 results outlined comparable sales momentum, progress in brand awareness, and operational execution, since then geopolitical events have significantly impacted consumer sentiment, likely exacerbating losses expected in the US. 

The company expects a one-off P&L impact of US$30-40m in FY26, including a cash component to be no greater than US$15m. The company has chosen to instead concentrate on its core Australian market, providing FY26 Australia segment (include Singapore and Japan) underlying EBITDA guidance of ~$85m (vs. BPe $85.7m, +29% YoY growth). 

They also reaffirmed 32 net new restaurant openings in Australia, with the long-term 1,000 restaurant target unchanged, supported by a near-term 108 restaurant pipeline.

Target price increases

Based on this guidance, Bell Potter has increased its price target to $24.50 (previously $22.10). 

The broker said higher EBITDA forecasts lifted its cash flow assumptions and increased the valuation. 

We welcome the US exit as a previous overhang removed on the stock and see the switch to focusing on the core Australia opportunity as more beneficial to shareholders. We are confident in the medium term Australia opportunity, backed by a pipeline of 108 restaurants, as well as the successful master franchising operation in Singapore and Japan.

Based on last week’s closing price of $19.81, the updated price target indicates nearly 24% upside for GYG shares. 

The post What is Bell Potter’s view on GYG shares after its US exit? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.