Analyst: Consensus Too High On Panera Bread Co., Buffalo Wild Wings

Two eateries that lately gave investors indigestion will be hard-pressed to meet expectations going forward, an analyst said Wednesday. Oppenheimer's Brian Bittner reiterated Market Perform ratings on both Buffalo Wild Wings

and Panera Bread Co.

, after each company posted quarterly results below the consensus. Buffalo changed hands recently down about 14 percent at $158.1; Panera was off about 1 percent at $183.69. Minneapolis-based Buffalo missed earnings expectations by nearly 7 percent Tuesday, blaming higher chicken prices as well as labor costs. Also Tuesday, Panera posted earnings about 1.3 percent below Street views. Earlier this month Panera hit a 52-week high on news it had "engaged in a constructive dialogue" with the activist hedge fund Luxor Capital Group LP and would boost buybacks to $750 million from $600 million previously authorized. But Bittner said St. Louis-based Panera's profit margins are eroding and Wall Street's 2016 earnings growth expectations of 11 percent are "optimistic." Although Bittner believes buybacks and a plan to sell some of Panera's company-owned cafes to franchisees could help grow earnings per share, "core margin estimates are too high." Despite missing first-quarter expectations, Buffalo Wild Wings on Tuesday maintained its 2015 earnings-growth forecast of 18 percent. "They'll need a very strong second half," Bittner said, with chicken wing prices moving lower and "new-found leverage on labor costs." Bittner cut his 2015 earnings estimate on Buffalo about 2 percent to $5.73 a share, versus the Wall Street consensus of $5.97.