California Pizza Kitchen shares rise on upgrade

Analyst Lynne Collier upgraded her rating to "Buy" from "Hold" and said a new promotion could improve same-store sales, or sales at stores open at least a year.

In the promotion called "Bounce Back," customers visiting California Pizza Kitchen from April 16 to May 16 will receive a card that contains a prize but cannot be opened until the next visit. The prizes range from 10 percent off a meal to $25,000 in cash.

The analyst said based on conversations with managers, the promotion has been a hit with customers so far. She said the promotion could lift sales by as much as 1.8 percent in the second quarter.

Collier added that he expects the company's earnings to improve in the second half of the year, partly from slightly lower commodity costs and easier same-store sales comparisons.

Collier said she expects the company will also receive a boost from economic stimulus checks being sent out to consumers to increase spending. The payments are being deposited in bank accounts now. Paper checks go out starting Friday.

California Pizza Kitchen shares rose 47 cents to $16.23 in afternoon trading after climbing more than 5 percent earlier in the day.