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July 24, 2013
11:36 EDTPNRAPanera falls after disappointing results, lowered outlook
Shares of national bakery-cafe operator and franchiser Panera Bread (PNRA) are falling after the company reported disappointing second quarter results and issued a weak outlook for the third quarter and full year. WHAT’S NEW: Last night, Panera reported second quarter earnings per share of $1.74 and revenue of $589M. Consensus estimates for EPS and revenue were $1.77 and $596.02M, respectively. The company also issued disappointing guidance for the third quarter and full year. They forecast third quarter EPS of $1.32-$1.36 against analyst views of $1.46. Full year EPS was lowered to $6.75-$6.85, consensus $7.05. The company said its lower EPS target reflects lower than previously expected growth in company-owned comparable bakery-cafe sales. The company lowered its target for company-owned same cafe sales growth for fiscal 2013 to 3.0% to 5.0%, from its previous target of 4.0% to 5.0%. ANALYST REACTION: In a note to investors, Stifel analyst Paul Westra said Panera shares appear to be fairly valued despite the company's still impressive long-term growth prospects. Stifel reiterated its Hold rating on the restaurant operator's stock. PRICE ACTION: In late morning trading, Panera fell $13.36 or 7.34% to $168.65 on more than three times the average daily volume.
News For PNRA From The Last 14 Days
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November 23, 2015
10:54 EDTPNRABattleground: Analysts vary widely in assessing E. coli impact on Chipotle
Research firms had very different views on Chipotle's (CMG) outlook after the company announced late Friday afternoon that six new cases of E coli linked to its restaurants had been identified in four additional states, triggering a 12.5% decline in the shares. JPMorgan wrote that the selloff in the stock was overdone, as the E.Coli outbreak should have only "a limited impact" on the company's results. Similarly, research firm William Blair does not expect the casual dining company's results to be meaningfully impacted by the news. However, Bank of America/Merrill Lynch downgraded the stock two notches, to the firm's equivalent of a Sell, and Sterne Agee cut its rating on the name to Neutral, with both firms predicting that the new E.coli cases would meaningfully hurt Chipotle's results. BACKGROUND: Chipotle announced that it was informed by the federal government that six new cases of E.coli had been found which matched a previous strain of the disease linked to the company's restaurants. Five of the six newly diagnosed individuals reported that they had recently eaten at Chipotle restaurants, the company reported late Friday. The previous outbreak of E.coli had been restricted to Washington state and Oregon, but the new cases involved individuals living in California, New York, Minnesota and Ohio. BULLS: According to JPMorgan analyst John Ivankoe, the selloff in Chipotle's stock is overdone, as the E.coli outbreak seems to be "very contained and minor." The six additional cases do not mean that a "widespread outbreak" has occurred, wrote the analyst, who expects the company's comp sales to drop about 2% this quarter and to be flat in the first quarter of 2016 before rising 2% in both Q2 and Q3. Moreover, he believes that "numerous" initiatives that the company is undertaking could drive its comp sales higher. Ivankoe trimmed his price target on the name to $680 from $750 but kept an Overweight rating on the shares. William Blair analyst Sharon Zackfia says that if the 12.5% drop in the stock on Friday implies that 12.5% of the company's 2016 profits could be at risk, it appears investors expect the company's same-store sales to decline 7%-8% next year. Zackfia says that such a decline is "highly unlikely," and she believes that Chipotle's same-store sales could actually "firm" in 2016. The analyst, who expects the company to emerge "largely unscathed" from the outbreak, kept an Outperform rating on the stock. BEARS: BofA Merrill Lynch analyst Joseph Buckley lowered his rating on Chipotle two notches to Underperform, the firm's equivalent of Sell, from Buy. The new cases suggest that the E.coli outbreak is national and not just confined to the Pacific Northwest region, the analyst stated. Chipotle's same-store sales will drop 4% this quarter, as the short-term impact on the company could be magnified because it has benefited in the past from being seen as having high quality food, Buckley believes. However, the analyst added that he does not expect the E.coli outbreak to hurt the company over the longer term. Nonetheless, he slashed his price target on the name to $470 from $750. Also downgrading Chipotle was Sterne Agee analyst Lynne Collier, who cut her rating on the name to Neutral from Buy. The fact that the source of the problem has not been identified creates doubt about whether the bad news for the company is over, Collier believes. Although the new cases of E.coli appear to have occurred during the same time period as the previous reported cases, the company's sales could still be negatively affected for 6-12 months, wrote the analyst, who now expects its SSS to fall 2% this quarter. She lowered her 2016 EPS estimate for the company to $19.22 from $20.40. WHAT'S NOTABLE: Maxim Group upgraded its rating on Panera Bread (PNRA) to Buy from Hold, predicting that the restaurant operator would benefit from Chipotle's problems. The firm set a $210 price target on the shares. Yum! Brands' (YUM) Taco Bell and Jack in the Box's (JACK) Qdoba are other competitors of Chipotle. PRICE ACTION: In morning trading, Chipotle rebounded 6% to $568.33.
10:00 EDTPNRAOn The Fly: Analyst Upgrade Summary
Today's noteworthy upgrades include: Abercrombie & Fitch (ANF) upgraded to Peer Perform from Underperform at Wolfe Research... Constellation Brands (STZ) upgraded to Outperform from Market Perform at Cowen... Dick's Sporting (DKS) upgraded to Buy from Hold at Canaccord... Encana (ECA) upgraded to Buy from Hold at Evercore ISI... Genomic Health (GHDX) upgraded to Buy from Neutral at UBS... HP Inc. (HPQ) upgraded to Buy from Hold at Maxim... Heritage Commerce (HTBK) upgraded to Buy from Hold at Sandler O'Neill... James River Group (JRVR) upgraded on improved outlook at BMO Capital... Kellogg (K) upgraded to Outperform from Neutral at Credit Suisse... KeyCorp (KEY) upgraded to Buy from Hold at Jefferies... Och-Ziff Capital (OZM) upgraded to Outperform from Market Perform at Keefe Bruyette... PBF Energy (PBF) upgraded to Buy from Neutral at Goldman... Panera Bread (PNRA) upgraded to Buy from Hold at Maxim... Parkway Properties (PKY) upgraded to Buy from Neutral at Mizuho... PepsiCo (PEP) upgraded to Neutral from Reduce at Nomura... Sanchez Energy (SN) upgraded to Buy from Accumulate at KLR Group... Sonoco (SON) upgraded to Outperform from Neutral at Macquarie... Synchrony (SYF) upgraded to Buy from Neutral at Sterne Agee CRT... Telecom Argentina (TEO) upgraded to Neutral from Sell at Goldman... Teva (TEVA) upgraded to Buy from Neutral at Goldman... TransAlta (TAC) upgraded to Sector Perform from Underperform at RBC Capital... Universal Insurance (UVE) upgraded to Outperform at Keefe Bruyette... Willis Group (WSH) upgraded to Hold from Sell at Deutsche Bank... YPF (YPF) upgraded to Buy from Neutral at Goldman.
08:08 EDTPNRAMaxim sees Panera benefiting from Chipotle woes, upgrades to Buy
As reported previously, Maxim analyst Stephen Anderson upgraded Panera Bread (PNRA) to Buy from Hold, contending that the fast casual chain will be a beneficiary of market share gains at the expense of Chipotle (CMG) as the Mexican restaurant chain experiences extended sales pressure due to the recent E. coli outbreak linked to its locations. Anderson, who also expects rising same-restaurant sales, easier labor comparisons and lower commodity costs to see Panera's margin expansion to return by end 2016, raised his price target on the stock to $210 from $208.
07:28 EDTPNRAPanera Bread upgraded to Buy from Hold at Maxim
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