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Summary

  • Panera Bread profitability remains strong.
  • Positive earnings beat along with technical factors are creating a tradable dip.
  • A main risk is dietary shifts away from bread.

Panera Bread (NASDAQ:PNRA) is has created a buyable base for entering long positions. Panera is one of the leading bakery franchises in North America. The company is reasonably valued with a 21.55 P/E and its balance sheet is healthy with a debt/equity ratio of 0.14. A recent modest earnings beat in Q2 2014 and MAC-D momentum crossing bullish signal an entry opportunity.

The main risk for Panera which has caused the stock to decline is declining bread consumption. Despite dietary trends moving away from wheat and carbohydrates, Panera has remained highly profitable. The company has an operating margin of 11.8% and a return on invested capital of 27.6%.

In the video, below we go over more into the details of our quick take on the company.

Source: Panera Bread: Buy The Dip?