Panera Bread Co. (PNRA) trades around $170.75 versus its 52-week range of $104.28-$175.29, up 55% in the last 1 year. It trades at a P/E multiple of 30 times, and a forward P/E of 25 times. Its competitor Wendy's (WEN) is trading at a P/E of 29 times and a forward P/E of 23 times. Also, Chipotle (CMG) trades at a P/E multiple of 33 times, and a forward P/E of 27 times. Panera reports Q3-2012 earnings after market close on October 23rd, 2012. Historically, the company has given very conservative guidance, and the company has not reported less than 22% EPS growth in the last 10 years. Fundamentals that could trigger an upside in the stock performance are:
Panera Bread's earnings growth will have a positive impact from the 53rd week in 2013, which could add as much as 2% to EPS.
Panera is making a strong push towards better technology to drive top line growth during rush hour. The introduction of mobile/kiosk ordering will help in driving traffic going forward.
As of June 26, 2012, the company has $256 million in cash & cash equivalents, and $0 public debt. To add to the liquidity, the company has a $250 million revolver issued by Bank of America, which has $0 outstanding. This strong liquidity position supports the company in franchise acquisitions, and technology upgrade initiatives that the company expects to continue going into 2013.
Panera has been making a conservative push towards cable TV advertising, spending 1-1.5% of its revenues towards it. This spend will have greater benefits going into 2013 and beyond.
Lastly, the company thrives on a diverse customer base, and the diverse pricing on it's menu has contributed to its success.
Top institutional holders of the stock are T Rowe Price (10%), FMR LLC (8%), Vanguard Group (5%), Hussman Strategic Advisors (3%), and Barclays Global (2%)
The chart below compares share performance of Panera and it's competitors over the past year. "E"s mark earnings reports.
click to enlarge image
Risks in investing in Panera include the a possible continuation in high unemployment, and higher commodity prices.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.