Panera Bread (PNRA) is a wonderful stock to own. During the past decade the stock’s grown 15% annually. What amazes me is how the company can continually grow at a rapid rate even though it’s saturated certain areas across the country. Panera Bread has more than 1500 company-owned and franchises stores in 42 states and Ontario, Canada (half the stores are company-owned).
Management buys back shares and uses a black-and-white annual report to save money. But same store sales of 1-2% (current and future) will keep the stock in check.
One Year Chart
Now with same store sales growth stalling to around 1-2% the company is going through a period of 5% to 11% profit growth (at least that’s what is projected). P/E of 22 is good considering it was 26 last quarter and PNRA usually has a P/E in the 20s.
PNRA didn’t beat the street and estimates got hit as well. 2014 & 2015 estimates got slashed. Big time. 2014’s from $7.83 to $7.33 and 2015’s from $9.25 to $8.65. That could happen again next quarter. The threat of such will keep the stock in check.
Fair Value
PNRA has good upsidde to its Fair Value. Long-term investors can buy the stock now if they wish.
Sharek’s Take
Panera Bread is a great stock to own and hang on to. Unfortunately this 17% grower always has a P/E in the 20s. I want to wait and see if we can get PNRA at a slightly better price. Since annual estimates fell and same store sales growth has stalled, I feel momentum has left PNRA. If the stock gets kept the stock in check for a year so I might have an opportunity to get it for 17 times earnings.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
