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Wall Street (Mostly) Bullish On Panera With Earnings On Tap

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The Technical Take: Wedbush Fears Price Rise Too High In Panera Bread

Panera Bread Co (NASDAQ: PNRA) is scheduled to report its second quarter results after Tuesday's market close. The Estimize community (based on 32 estimates) is projecting the company will earn $1.67 per share on revenue of $683.58 million. This compares to the Wall Street consensus estimate calling for the company to earn $1.63 per share on revenue of $681.38 million.

Here is a recap of what Wall Street's top analysts were saying ahead of the print.

Piper Jaffray: Panera ‘Well Positioned' To Optimize Brand

Nicole Miller Regan of Piper Jaffray upgraded shares of Panera Bread to Overweight from Underweight with a price target boosted to $200 from a previous $140 on July 14.

According to Miller Regan, Panera Bread's management team is now "better positioned" to optimize the company's brand image and its balance sheet. The analyst justified her new rating by noting channel checks suggested "stable" top-line and store-level profitability trends.

Miller Regan said Panera's "2.0" transformation is an investment strategy that is "undeniably both healthy and productive" for the company's long-term prospects, but it is not the "cure-all." As such, under a worst case scenario, shares will trade flat.

For the second quarter, Miller Regan is projecting a 2.0 percent comp gain and the company to earn $1.58 per share based on a 16.6 percent store-level margin.

Cowen: ‘Incrementally Encouraged' Following Management Meeting

Andrew Charles of Cowen And Company commented in a note in mid-June that he left Panera's "Open House" event in New York City "incrementally encouraged" by its "intensified efforts" around eliminated artificial ingredients and increased menu disclosures.

Panera Bread is even focused on its new marketing campaign "Food as it should be," which "strongly" fits with the analyst's transparent sourcing investment theme. The company's marketing campaign is designed to raise awareness around the initiative as more than 150 artificial ingredients will be removed from its menu by the end of 2016.

Bottom line, Panera's initiatives will be "the heart" of its menu innovation moving forward.

Shares were maintained with an Outperform rating and $210 price target.

Deutsche Bank: Evidence Of Success Needed

Karen Short of Deutsche Bank initiated coverage of Panera Bread in late May with a Hold rating and $180 price target.

According to Short, Panera Bread is "targeting a number of great initiatives" but the company needs to demonstrate evidence of its success before "becoming more constructive" on shares.

Short said Panera Bread is at year three of its "2.0" initiative, but she is getting the impression the company is still in a "national test phase." Despite that, the analyst acknowledged positive changes including image, service, convenience and technology.

Bottom line, until Panera Bread shows concrete proof that its initiatives are yielding success, Short argued "there are few things to get us excited about."

Latest Ratings for PNRA

DateFirmActionFromTo
Nov 2016WedbushDowngradesOutperformNeutral
Oct 2016Longbow ResearchUpgradesBuy
Sep 2016Maxim GroupMaintainsBuy

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Posted-In: Analyst Color Upgrades Price Target Previews Restaurants Analyst Ratings Trading Ideas General

 

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