Getting hungry? You might want to head to Panera Bread Co (NASDAQ:PNRA) to satiate your lunch craving and to follow the trend. After reporting $605 million in first quarter revenue, it is clear that you won’t be the only one dining at Panera Bread.
Panera Bread In The News
Following weak Q4 results after a tough winter, Panera Bread Co (NASDAQ:PNRA) reported $605 million in first quarter revenue, beating Street expectations of only $600.7 million. But, first quarter net income came in at $42.2 million, which is a 12% decline from the previous year over the same time period. CEO Ron Shaich wanted to put the numbers in perspective stating, “Investors should view the first quarter against the backdrop of PNRA’s comprehensive effort – extending over multiple years – to shape the future of our company.” The company also said that it is “narrowing” its full-year 2014 EPS guidance to a range of $6.80 to $7.0, a 5% drop in the top-end of the original guidance. So where does this leave Panera Bread stock?
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
What Do Analysts Have To Say?
After the Q1 report was released, Longbow Research analyst Alton Stump recommended SELL Panera Bread Co (NASDAQ:PNRA) with a $138 price target. Alton felt that the stock was “trading a lofty price to earnings multiple at 24.4, and a 20x multiple is “an appropriate forward earnings multiple in light of decelerating same-store traffic and pricing/mix trends and lack of earnings visibility through at least the end of 2015.” Alton is ranked 2334 out of 3046 analysts with a -2.5% average return over S&P-500.
However, 4-star analyst Robert Derrington of Wunderlich Securities recommended HOLD Panera Bread Co (NASDAQ:PNRA) back on March 26, but his thoughts remain the same. Robert was pleased with efforts to expand the business, but wanted to move forward cautiously. Robert stated, “while expansion of key 2.0 initiatives are expected to lift sales, the rollout of many of its key initiatives could result in choppy earnings growth in the near and medium term.” Before the numbers were released, Robert concluded that, “same-store-sales for the first quarter could come in modestly better than a flat projection and an improvement from same-store-sales declines of 2.2 percent in the first 48 days of the first quarter.” There is always risk in new business strategies, but Robert thinks Panera could be moving in the right direction. Robert is ranked 623 out of 3046 analysts with a +1.5% average return over S&P-500.
Panera Bread Co (NASDAQ:PNRA)’s first quarter results prove that the company is starting off the year better than they ended last year, but there might be some risks as 2014 progresses. Will Panera’s latest efforts to build the brand pay off? Investors will just have to wait and see.
Jordan Faigen covers financial investments and the latest stock market news. She can be reached at [email protected]