Only earnings line-item updates after Guzman y Gomez's U.S. exit; rating and target price unchanged

Overview

This report is a data update by Goldman Sachs on Guzman y Gomez (GYG.AX). The triggering event was the company's announcement of its exit from the U.S. market, after which Goldman Sachs revisited its near-term forecasts and updated FY26E adjusted net profit and net profit to reflect one-off costs and the breakdown of cash/non-cash items. The core conclusion of the report is that these changes are not material because operating earnings Adjusted EBITDA is unchanged, and the investment view, rating, and target price are also unchanged.

Core views

Goldman Sachs maintains its Neutral rating on Guzman y Gomez, with the 12-month target price unchanged at A$21.10. The report argues that the adjustments related to the U.S. exit mainly affect FY26E net profit measures rather than operating profitability, and therefore are insufficient to change the investment judgment. The valuation framework remains based on a blended approach of long-term DCF and EV/EBITDA multiples, while Goldman Sachs believes the probability of the company becoming an acquisition target is not material, and therefore does not incorporate M&A factors into the target price.

Analysis framework

The report uses a combination of post-event forecast updates and valuation review: first adjusting FY26E adjusted net profit/net profit based on the U.S. exit announcement, and then examining whether the adjustment affects Adjusted EBITDA, the investment thesis, and the rating; the target price continues to be determined by 50% 10-year DCF and 50% EV/EBITDA multiple method, with reference to comparable multiples of high-growth, high-quality QSR brand owners.

Methodology notes

• Valuation methods50/50 blended valuation method

  Combination of DCF and EV/EBITDA multiples

  The target price is based on 50% 10-year DCF and 50% EV/EBITDA multiple method. DCF assumptions include WACC of 9.2%, terminal growth rate of 3.0%, and risk-free rate of 3.5%; the multiple method uses 20x time-weighted FY26/27E EV/EBITDA.

• Valuation methodsComparable company multiple method

  Peer benchmark of high-growth, high-quality QSR brands

  Because Guzman y Gomez has a limited listed trading history and few direct local comparable companies in Australia, Goldman Sachs uses the equal-weighted average multiple of seven high-growth, high-quality QSR brand owners to balance near-term store-opening growth and long-term market opportunity.

• risk_assessmentM&A Rank

  Assessment of acquisition target probability

  Goldman Sachs' M&A Rank is scored from 1 to 3, where 1 represents high probability, 2 medium probability, and 3 low probability. The report states that the probability of Guzman y Gomez becoming an acquisition target is not material, so M&A factors are not included in the target price.

• factor_profileGS Factor Profile

  Comparison of growth, financial returns, valuation multiples, and composite factors

  GS Factor Profile compares individual stocks with Goldman Sachs-covered stocks and industry peers across growth, financial returns, valuation multiples, and composite percentiles, in order to provide investment context.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Guzman y Gomez (GYG.AX)

  Covered company and primary investment target

  Strengths

  Has QSR brand growth characteristics, with the valuation framework referencing high-growth, high-quality brand owners; Australian new store expansion and long-term market opportunity remain the core attractions.

  Weaknesses

  Limited trading history and few direct local comparable companies in Australia; the U.S. exit brings FY26E net profit measure adjustments and one-off costs.

  Comparison

  Goldman Sachs benchmarks it against seven high-growth, high-quality QSR brand owners on an equal-weight multiple basis, rather than relying solely on Australian local peers.

  Risks

  New store openings below expectations, stalled international expansion, slowing same-store sales growth, and compression in royalty rates.

Key data

• Report date2026-05-25 11:17AM AESTPublication time shown on the body page of the report.
• AnalystsElijah Mayr；Elise BaileyBoth authors are from Goldman Sachs Australia Pty Ltd.
• RatingNeutralThe report explicitly maintains a Neutral rating.
• 12-month target priceA$21.10Target price unchanged.
• Disclosed priceA$19.81The Guzman y Gomez price listed in company-specific regulatory disclosures.
• FY26E forecast adjustmentAdjusted net profit/net profit updatedUsed to reflect one-off costs related to the U.S. exit and the cash/non-cash composition.
• Operating earnings impactAdjusted EBITDA unchangedBased on this, Goldman Sachs believes the forecast adjustment is not material.
• DCF assumptionsWACC 9.2%；TGR 3.0%；RfR 3.5%Used for the 10-year DCF valuation.
• EV/EBITDA multiple20x time-weighted FY26/27EUsed for the multiples component in the blended valuation.

Impact & implications

The investment implication of this update is neutral: the forecast adjustment caused by the U.S. exit is more a net profit change at the accounting and one-off cost level, rather than a deterioration in core operating profitability. Since Adjusted EBITDA, the investment thesis, the rating, and the target price are all unchanged, the report offers limited directional signals for the share price; more important is whether subsequent performance in Australian store openings, international expansion, and same-store sales can validate the long-term growth assumptions.

Risks

• Australian new store opening targets may come in below Goldman Sachs expectations.
• International expansion may stall, especially as the market becomes more sensitive to the overseas growth path after the U.S. exit.
• Same-store sales growth may slow, affecting valuation support for a growth QSR.
• Royalty rates may compress, affecting profitability and valuation.
• Goldman Sachs has or expects to have an investment banking services relationship with Guzman y Gomez, and investors should pay attention to the disclosure of potential conflicts of interest.

What to watch

• The final scale of one-off costs related to the U.S. exit and the cash/non-cash split.
• Subsequent changes in FY26E adjusted net profit and statutory net profit.
• Whether Adjusted EBITDA continues to remain unaffected.
• Whether Australian new store opening progress reaches targets.
• The refocused direction of international expansion strategy after the U.S. exit.
• Trends in same-store sales growth and changes in royalty rates.