Panera Has 18% Upside, Says Piper Jaffray

In a report issued Monday, Piper Jaffray analysts Nicole Miller Regan and Joshua C. Long reiterated an Overweight rating and $225 price target on shares of Panera. The firm also reiterated a 3 percent same-store sales growth estimate for the third quarter of the year and expect to see an overall solid quarter at the company. In fact, they believe the same-store trends’ stability should help the stock price remain stable as well.

The experts assured they feel “encouraged by continued positive comp trends near-term.” Long term, they said, “The model is most powerful in terms of brand modernization efforts that provide a sales lift/leverage and from ancillary earnings benefits from early stage CPG and digital ordering efforts.”

Moreover, they think the aforementioned initiatives will engender cash flow for capital deployment – via share repurchases now and perhaps by way of a dividend at some time in the future. In time, they see the share repurchase program supporting double the earnings power outlook.

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