Baird's Long-Term Bull Thesis On Potbelly Intact

Baird reiterated an Outperform rating and $16 price target on Potbelly Corp PBPB. Analysts David E. Tarantino, Samuel J. Beres and Mary L. McNellis highlighted a slightly increased short-term risk profile.

Potbelly presented at Baird's Global Consumer, Technology, and Services Conference on Wednesday. The analysts left the exposition feeling as confident on their long-term thesis on the restaurant operator as they were before it, the report assured.

Nonetheless, the firm has decided to take “a more conservative approach” with its estimates for the second quarter, given that the management team's tone in relation to ongoing business trends were relatively guarded, as the results have been somewhat hit by unfavorable weather conditions.

Having said this, the analysts envision “a path to better momentum” in the second half of the year, driven by new product launches, pricing actions, and digital and mobile enhancements throughput gains, and a spike in back-line sales. Therefore, Barid continue to think the one-year-out risk/reward profile on Potbelly is favorable at current valuations.

Shares of Potbelly fell 2.03 percent on Thursday.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.