Jefferies Upgrades Panera Bread (PNRA) to Buy; Earnings Power Being Underestimated

Jefferies upgraded Panera Bread (NASDAQ: PNRA) from Hold to Buy with a price target of $245.00 (from $195.00), saying tech/op investment to drive EPS.

Analyst Alexander Slagle commented, "We believe the market is underestimating Panera's earnings power over the next few years as SSS accelerate with the brand's broadening consumer reach. Key SSS drivers include: 1) 2.0 conversions & digital ordering, 2) catering and 3) delivery. PNRA should command a premium valuation given improved SSS & earnings visibility, a potential uptick in margins, and a relative dearth of growth investment opportunities in consumer.

The analyst expects SSS to accelerate to the 4.5-5.0% range in '16 & 17 (cons 4%), despite a more competitive promotional environment in the industry.

The firm's '16/17 EPS goes to $6.60/7.92 (fr $6.50/7.60).

For an analyst ratings summary and ratings history on Panera Bread click here. For more ratings news on Panera Bread click here.

Shares of Panera Bread closed at $211.36 yesterday.

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