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Dunkin' Brands Analyst Says Q2 Positives Outweigh The Negatives

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Dunkin' Brands Analyst Says Q2 Positives Outweigh The Negatives

Dunkin Brands Group, Inc. (NASDAQ: DNKN) continues to perform well during the pandemic, although some bears are highlighting elevated expectations and unexpected store closures, according to KeyBanc Capital Markets.

The Dunkin’ Analyst: Eric Gonzalez reiterated an Overweight rating on Dunkin' Brands with a $78 price target. 

The Dunkin’ Thesis: Dunkin’s second-quarter positives far outweigh the negatives, and after Thursday's quarterly report, “we have even more conviction that these efforts are setting the chain up for future success,” Gonzalez said in a Thursday note. (See his track record here.)

The analyst named the following as key investment points for Dunkin’:

  • The pace of recovery in Dunkin’s U.S. segment is going well as store volumes approach normal levels. 
  • Drive-thru locations showed signs of growth despite tailwinds that benefited categories like pizza and hamburgers. 
  • Store closings have reflected the positive alignment between Dunkin’s management team and store owners and the possibility of unit growth. 
  • Enrollment in Dunkin’s DD-Perks program increased 110% in the second quarter, and digital orders increased 18% year-over-year overall. 

For 2020 and 2021, KeyBanc raised its EPS estimates for Dunkin’ to $2.62 and $3.08, respectively.

DNKN Price Action: Dunkin' Brands shares were up 0.55% at $69.03 at last check Friday. 

 

 

Latest Ratings for DNKN

DateFirmActionFromTo
Sep 2020Piper SandlerUpgradesNeutralOverweight
Jul 2020Credit SuisseMaintainsOutperform
Jul 2020Morgan StanleyMaintainsEqual-Weight

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