Credit Suisse Raises Numbers on Dunkin' Brands (DNKN) on SSS Acceleration
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Credit Suisse analyst Jason West reiterated an Outperform rating and bumped his price target on Dunkin' Brands (NASDAQ: DNKN) to $52.00 (from $51.00) saying checks suggests acceleration in SSS.
West commented, "We caught up with several Dunkin' US franchisees recently to gauge sales trends in 3Q to-date. Our checks suggest the US business has gained some momentum over the past 2-3 months, led by the rollout of Cold Brew coffee and a generally more impactful new product pipeline. Our contacts continued to point to intense competitive activity in the coffee space, especially from convenience stores. However, we also heard a consistent message of improved sales trends beginning in July/Aug, leading us to raise 2H forecasts."
The firm raised Q3 SSS estimates from 1.2% to 2%, which compares to the consensus of 1.2%. Q4 SSS estimates move from 1.3% to 2.5%, versus the consensus of 1.7%. The firm's 2016/2017 EPS moves to $2.23/$2.44 from $2.22/$2.42, putting us ~1-2c above consensus.
Shares of Dunkin' Brands closed at $47.71 yesterday.
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