Weak Revenues Leave A Hole In The Middle Of Dunkin's Q3 Performance

There are several near-term concerns surrounding Dunkin Brands Group IncDNKN despite a slight Q3 earnings beat last week.

Disappointing revenues in Q3 continued to weigh on shares after the release.

Argus says increases in labor costs are expected to be offset by price increases, however, this will likely come at the expense of store traffic and comp sales in the short term.

Dunkin management provided some weak guidance after announcing it was expecting same-store sales to be in the range of flat to 2 percent higher in 2016.

Analysts at Argus provided some caution surrounding these near-term concerns and believes shares are trading near fair value.

Argus maintains a Hold rating in the short term, but for a five-year time frame is still optimistic about the company and rates it a Buy.

"Over the long term, we remain optimistic about Dunkin's strong franchise program, established brands, digital sales initiatives, and opportunities to expand into new sales channels and geographic regions," said Argus analyst John Staszak.