Brand new Panera opened up less than 2 miles from my house, yay!!
I don't know why anyone would dis Panera. Now it may not be the next Apple or anything in terms of investing, but if you compare it to say Chipotle, Panera looks cheap. I eat there twice a week for lunch and once or twice a week for breakfast (far more than I visit any other restaurant chain). I like it because it is much cheaper than a sit down casual restaurant (self-serve don't have to tip) but it so much better than 95% of the greasy fast food places out there. Lunch at under $10.00 is easy on the budget too plus they give you reward points so I get lots of freebies too. Plus great atmosphere to catch up and surf the web. Lots to like...
i have to agree, they are probably the best chain going right now, and deserve a valuation like cmg, far more than cmg does. I am short cmg and long pnra. every time I go there they are packed. however, the customers all seem happy and the staff is always very friendly and professional. unlike many other chain restaurants. I definitly see this going to new highs.
A great product is necessary for a successful investment. But, it is not sufficient by itself. Panera's stated goal is to grow earnings by 15-20% per year. They have consistently outperformed their stated goals, and are rewarded well for that in the market. But, analysts' forecasts for 2013 are still only 20% growth. And, comps for the two upcoming quarters will be very tough, unless the Midwest again experiences 80 degree days in February. So, whatever premium PNRA has for steady performance vs. Chipotle, Mickey D's and others is in danger. Barring that, this is a P/E 30 stock with long-term growth of 20%. A PEG of 1.5 is not buy territory, but more like sell territory. I would gladly buy PNRA again at the right price, but this is not it.
Great product is certainly necessary for a great investment--the company won't last without it. But it is not sufficient in itself. This is a company that publicly targets growing 15-20% a year, with a P/E of 30. Even knowing that they frequently outperform their public targets, analysts forecast 20% earnings growth for next year. This puts their PEG at 1.5, which is sell territory rather than buy territory. I think Panera is being rewarded for performing in a quarter where others stumbled. (notably Chipotle) But there are very tough comps coming for the winter quarter, and the short-term fall could be hard. I would gladly buy Panera again at the right price, but this isn't it.