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UBS Evidence Lab Digs Into Dunkin Brands

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In a report published Thursday, UBS analyst Keith Siegner maintained the Neutral rating and $52 price target on Dunkin Brands Group Inc (NASDAQ: DNKN). Following the company's robust Q1 results and subsequent rise in stock valuation, the analyst believes that it has become even more important for Dunkin Brands to maintain comps consistency.

"Our geospatial analysis indicates competitive threats from ubiquitous quality coffee could represent ongoing challenges," Siegner said, adding "We remain concerned about the MT sustainability of Dunkin' Donuts sss strength against an increasingly competitive and promotional environment."

While the analyst believes that the company can overcome the situation with innovation in its food and beverage offerings, effective services and a focus on mobile/loyalty, the risk/reward profile appears balanced, given the limited visibility into the sustainability of the same-store sales trends.

The analyst also expects the company to face competitive headwinds from several of its peers going forward. The management commented recently that adding stores in Dunkin Brands' core markets might limit some comp upside, but it would not meaningfully cannibalize comps.

"Larger est. comp store drags would drive greater impact, but still manageable under most scenarios," Siegner added.

Latest Ratings for DNKN

DateFirmActionFromTo
Nov 2020WedbushMaintainsNeutral
Nov 2020Morgan StanleyMaintainsEqual-Weight
Nov 2020BMO CapitalMaintainsMarket Perform

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Posted-In: Keith Siegner UBS VetrAnalyst Color Reiteration Analyst Ratings

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LBCredit SuisseMaintains36.0
TRGPCredit SuisseMaintains40.0
SNOWCredit SuisseMaintains275.0
DARCredit SuisseMaintains95.0
CLRMKM PartnersDowngrades26.0
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