Shares of Dunkin' Brands (DNKN), the parent company of Dunkin' Donuts and Baskin-Robbins, were lower in afternoon trading after a Goldman Sachs analyst downgraded the stock, citing comp and unit growth risks as well as increasing competition from McDonald's (MCD) McCafe and 711.

GOLDMAN SAYS SELL: Goldman Sachs analyst Karen Holthouse downgraded Dunkin' Brands Group to Sell from Neutral and cut her price target on shares to $47 from $48, saying that comp and unit growth risks in the U.S. present downside risk to a stock trading at the high end of its valuation range. The analyst said in a note to clients that while outsized exposure to winter storms in the Northeast presents some risk to the company's first quarter results, she believes that the greater challenge stems from breakfast promotions in the quarter from McDonald's McCafe and 7-11. Holthouse added that unit growth continues to decelerate towards the low end of the company's 4%-6% U.S. target, with 2016 falling short of expectations. The analyst lowered her 2017 U.S. Dunkin' Donuts comp forecast to up 1% from up 1.7% and cut her Q1 comp forecast to down 0.5% from up 0.5%.

WHAT'S NOTABLE: In January, McDonald's revamped its McCafe coffee concept, offering any size coffee for $1 and specialty drinks like lattes for $2. "This is a substantial discount to Dunkin's pricing, and search trends show an ongoing benefit to consumer interest in McDonald's for coffee," Holthouse told clients adding that "This could suggest traffic share gains in the quarter." Holthouse also noted that Google search trends have been "effective" indicators of other promotions, including the $4 for $ deal at Wendy's (WEN), the $1 menu at Taco Bell (YUM) and Jack in the Box's (JACK) Brunchfast menu.

DOWNGRADE FOLLOWS CFO DEPARTURE: The downgrade comes a week after Dunkin' Brands announced that chief financial officer Paul Carbone will leave the company effective April 21 to take a "general management position" in the specialty retail industry. Kate Jaspon, Dunkin' Brands VP, Finance and Treasurer, will serve as interim CFO upon his departure, the company said.

PRICE ACTION: Shares of Dunkin' Brands are down 2.37% to $54.78 in afternoon trading.