Panera's Brand Remains Strong, And Piper Jaffray Says Stock Could Be Near Bottom

Piper Jaffray issued a company note on Panera Bread Co (NASDAQ: PNRA) and issued its earnings projections for the year. Piper Jaffray rates the restaurant chain as Underweight with a price target raised form $125 to $140.

Analysts Nicole Regan and Joshua Long wrote, "we believe the sentiment on PNRA shares is forming a bottom as 56 percent of sell-side ratings reflect a hold/sell opinion. Although we do still expect shares to be range bound we have adjusted our price target upwards to reflect an industry average EBITDA multiple. While valuation in isolation leaves us less negative, we await greater visibility into a permanent management team and the rollout of the 2.0 platform by franchisees before becoming more constructive."

Piper Jaffray notes that Panera has experienced eight transitions at the CEO, COO, and CFO level in the past five years. This has caused concern over the stability of management and the company's strategic goals. However, because Panera pioneered the fast-casual segment and has a loyal following of customers Piper Jaffray has little concern with the long-term sustainability of the Panera brand.

Shares of Panera Bread recently traded at $160, up 0.29 percent.