Piper Jaffray Reiterates an 'Overweight' on Einstein Noah Restaurant (BAGL); Gaining Market Share: Top Small Cap Pick

August 7, 2009 11:35 AM EDT

Piper Jaffray & Co. reiterates an 'Overweight' rating on Einstein Noah Restaurant Group (Nasdaq: BAGL), raises price target $1 to $15.

Piper analyst says, "We believe the company's intense focus on promoting frequency/traffic continues to build steam due to increased marketing expenditures ($500k higher on y-o-y basis in 2Q09) in addition to
promotions such as "Free Bagel Fridays". Additionally, we believe that the new product innovations that focus on delivering value have resonated with trial (or first time) customers, which we expect to lead to repeat customer visits in the future...We have increased conviction in the company's ability to attain flat y-o-y restaurant level margins in 2H09 due to commodity relief (i.e., wheat), savings related to the theoretical food cost initiative and effective use of the company's labor matrix...Based on the better than expected 2Q09, we are increasing our FY09 and FY10 earnings estimates $0.05 each to $0.82 and $0.85 per share, respectively."

To see more analyst ratings on BAGL Click Here.

Einstein Noah Restaurant Group, Inc. owns, operates, franchises, and licenses bagel specialty restaurants in the United States.

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