Wedbush Reaffirms Neutral On Dunkin’ Brands Following Analyst Day
In a research report published today, Wedbush analyst Nick Setyan maintained a Neutral rating on Dunkin’ Brands Group (NASDAQ:DNKN) with a $42 price target, following the company’s analyst day.
Setyan wrote, “Management guided Q3 DD U.S. comps to 2-2.25% vs. consensus of 2.7%, but reiterated 2014 guidance of 2- 3% DD U.S. comp growth and EPS of $1.73-1.77 on 380-410 net DD U.S. openings and 300-400 net international openings. Initial 2015 guidance calls for 10- 12% adj. operating income growth (in line with LT guidance) on 2-4% DD U.S. SSS growth (slightly below 3-4% LT guidance) and 5%+ net DD U.S. unit growth. Given our expectation for a reacceleration in DD U.S. comps in Q4:14 and 2015 and share repurchases ahead of expectations, we believe guidance is realistic.”
Setyan continued, “Management highlighted product and marketing innovation as sales drivers, including the nationwide launch of dark roast and new chicken and protein platforms in Q4, continued sandwich and beverage LTOs, throughput, daypart expansion, and benefits from DD perks and mobile/digital initiatives. We believe DD perks in particular may prove a significant comp driver as adoption increases.” Setyan added, “We believe Dunkin’s current valuation properly reflects its large domestic and international growth opportunities, as well as the advantages of its franchised model.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Nick Setyan has a total average return of 14.5% and a 61.8% success rate. Setyan has a 45.1% average return when recommending DNKN, and is ranked #437 out of 3303 analysts.