3Q Estimates
Wedbush expects third-quarter earnings per share of $1.34 on revenues of $691 million, in line with the consensus earnings per share but ahead of the $682 million consensus estimate.
Panera's quarterly results are due after the close on October 25.
Comp Upside Likely
Based on its checks, Wedbush believes same store sales results will be in line to above the 3.8 percent consensus estimate. Re-acceleration in September due to easier comparisons and Panera 2.0 are driving comps. higher, the firm noted. Wedbush also mentioned of the salubrious impact of delivery.
According to Wedbush, comp growth, near, medium and long term is likely due to drivers such as Panera 2.0, marketing & catering and delivery in place. The firm believes earnings per share growth will re-accelerate in 2017. Refranchising and share repurchases remain positive catalysts, the firm noted.
Shares Present Opportunity
The firm believes Panera 2.0 catering initiatives, delivery and national marketing are poised to sustain sales lifts ahead of expectations. Despite believing that these investments will pressure margins through 2017, the firm said the shares continue to present an opportunity at current valuations, given the company's underlying earnings power.
Wedbush maintains its Outperform rating on Panera Bread, while it lowered its price target to $220 from $250 on lower peer valuations.
Panera Bread shares were up 0.62 percent at $192.00 at last check.
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