Dunkin' Brands (DNKN) PT Lowered to $45 at UBS on Weak Comps

UBS analyst Keith Siegner lowered his price target on Neutral-rated Dunkin' Brands (NASDAQ: DNKN) to $45.00 (from $52.00) as comps disappoint.

Siegner commented, "While today's analyst & investor event at "Giants Stadium" showcased a compelling new product pipeline and detailed upcoming digital/loyalty capabilities, two areas in which investors were most focused, NT comps momentum and details into Western expansion, disappointed. 3Q Dunkin' U.S. sss of +1.1% missed the cons. +2.5% as comps declined sequentially throughout the Q despite efforts to drive traffic. DNKN cited: 1) excessive pricing; 2) a pulled promo given egg costs; 3) K-Cup drag (60-70 bps); and 4) negative impact from overdone menu simplification. Even more concerning are upcoming headwinds as competition remains fierce, incl. the 10/6 launch of MCD breakfast all-day and a full Q of SBUX mobile order & pay nationwide. LT guidance (next 5 yrs) was also adjusted slightly lower including adj. EPS growth of "up to 15%" vs. 15%+ prior. Even after today's pullback and despite a still very attractive business model, we believe risk/reward remains balanced given increased competitive pressures and a lack of NT catalysts."

For an analyst ratings summary and ratings history on Dunkin' Brands click here. For more ratings news on Dunkin' Brands click here.

Shares of Dunkin' Brands closed at $43.00 yesterday.

You May Also Be Interested In

• UBS Upgrades Galp Energia (GALP:SM) (GLPEY) to Neutral
• Temenos AG (TEMN:SW) (TMSNY) PT Lowered to CHF58 at Barclays
• UBS Upgrades Swiss Prime Site AG (SPSN:SW) (SWPRF) to Buy