Guzman y Gomez (GYG) experienced a surge in shares on Wednesday after UBS analyst Shaun Cousins provided a positive outlook. Cousins upgraded the fast-food chain from sell to neutral and increased the 12-month price target from $37 to $40.

The analyst highlighted GYG's potential to surpass market expectations for annual sales growth and earnings margin. Cousins identified menu innovations, extended opening hours, and a rise in delivery orders as key drivers of growth. He also noted that GYG's same-store sales growth has consistently outperformed market estimates, averaging 1.8 percent above projections since the 2017 financial year.

UBS expressed confidence in GYG's long-term growth potential, with 15 new outlets opened in the first half of the year. GYG aims to have 1,000 locations in Australia over the next two decades. Currently, GYG operates over 220 outlets across Australia, Singapore, Japan, and the US, in various formats including universities, food courts, and drive-throughs. The stock closed at $40 on Wednesday, representing a 4.4 percent increase.