Consensus Too High On Panera Bread, Buffalo Wild Wings?

Two eateries that lately gave investors indigestion will be hard-pressed to meet expectations going forward, an analyst said Wednesday.

Oppenheimer's Brian Bittner reiterated Market Perform ratings on both Buffalo Wild Wings (NASDAQ: BWLD) and Panera Bread Co (NASDAQ: PNRA), after each company posted quarterly results below the consensus.

Buffalo changed hands recently down about 13 percent at $159.99. Panera was off about 1.8 percent at $182.20.

Buffalo missed earnings expectations by nearly 7 percent Tuesday, blaming higher chicken prices as well as labor costs.

Also Tuesday, Panera posted earnings about 1.3 percent below Street views.

Earlier this month Panera hit a 52-week high on news it had "engaged in a constructive dialogue" with the activist hedge fund Luxor Capital Group LP and would boost buybacks to $750 million from $600 million previously authorized.

But Bittner said Panera's profit margins are eroding and Wall Street's 2016 earnings growth expectations of 11 percent are "optimistic."

Although Bittner believes buybacks and a plan to sell some of Panera's company-owned cafes to franchisees could help grow earnings per share, "core margin estimates are too high."

Despite missing first-quarter expectations, Buffalo Wild Wings on Tuesday maintained its 2015 earnings growth forecast of 18 percent.

"They'll need a very strong second half," Bittner said, with chicken wing prices moving lower and "new-found leverage on labor costs."

Bittner cut his 2015 earnings estimate on Buffalo about 2 percent to $5.73 a share, versus the Wall Street consensus of $5.97.