Wells Fargo Turns Negative On Dunkin' Brands
Jeff Farmer of Wells Fargo on Thursday downgraded shares of Dunkin Brands Group Inc (NASDAQ: DNKN) to Market Perform from Outperform due to valuation concerns with an unchanged valuation range of $46 to $48.
“We believe current valuation reflects the prospect for modest top and bottom line growth in the near and intermediate term,” Farmer wrote. The analyst adds that he expects low-single-digit same-store sales growth trends to remain given ongoing competitive headwinds, the company's pursuit of strategic/”smart” discounting and continued K-Cup sales headwinds.
Farmer does add that investors view Dunkin' Donuts U.S. same-store sales growth as a key barometer of business trends, and shifts in same-store sales have historically had a meaningful impact on valuation. The analyst adds that the company has already stated it expects 1 percent to 3 percent same-store sales growth in 2015, below the long-term target of 2 percent to 4 percent.
Bottom line, Farmer expects to see a limited multiple expansion until there is greater clarity on both the drivers and timing of the resumption of margin expansion.
Latest Ratings for DNKN
Date | Firm | Action | From | To |
---|---|---|---|---|
Nov 2020 | Wedbush | Maintains | Neutral | |
Nov 2020 | Morgan Stanley | Maintains | Equal-Weight | |
Nov 2020 | BMO Capital | Maintains | Market Perform |
View More Analyst Ratings for DNKN
View the Latest Analyst Ratings
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: Dunkin' Donuts Jeff Farmer K cups Wells FargoAnalyst Color Downgrades Analyst Ratings