Bear Of The Day: Panera Bread

There is arguably a boom happening in the restaurant sector right now. Companies are seemingly going public on a monthly basis in the space, with firms like Shake Shack (SHAK), El Pollo Loco (LOCO), and Zoe’s Kitchen (ZOES) highlighting the recent wave.

We have also seen strong sales or earnings growth for many companies in this sector, leading to big gains to start 2015. In fact, the Zacks Industry Rank for the retail-restaurant segment is currently just outside the top 15%, suggesting that this is a very promising area for the market.

However, while most stocks in this corner of the investing world have done well, a few haven’t ridden the wave to gains. One such company that has been having trouble despite the positive environment is undoubtedly Panera Bread (PNRA - Analyst Report).

PNRA in Focus

Panera is a St. Louis-based (originally known as the ‘St. Louis Bread Company’) firm that owns and operates bakery-cafes across the U.S. and Canada. PNRA is closing in on 2,000 stores and it has grown quickly since its humble beginnings less than 35 years ago.

The most recent news for Panera, however, has not been great as the stock has lost about 10% since the start of 2015. While PNRA beat earnings estimates, the stock slumped on revenue worries and concerns over the full year. PNRA management warned that EPS for 2015 could decline as the company works to speed up customer service, putting many investors on edge for the time being.

PNRA Estimates

The concerns have also hit analyst expectations as estimates have been nearly universally cut in recent days.  Not a single estimate has moved higher for either the current quarter or current year in the past sixty days, reflecting the universal agreement among analysts on PNRA’s prospects.

The consensus estimate has also taken a hit thanks to these revisions, as PNRA is now expected to see EPS decline by 7.05% this quarter, and 4.3% for the full year. And for the full year, estimates just 30 days ago were baking in an EPS increase, showing just how much analyst opinion has turned on PNRA lately.

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