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Analyst Actions: CarMax, Panera Bread


From Standard & Poor's Equity ResearchWACHOVIA MAINTAINS UNDERPERFORM ON CARMAX

Wachovia analyst Richard Kwas says CarMax's (KMX) first quarter EPS were $0.13, vs. his $0.18 estimate and $0.22 consensus. He says relative to his estimate, the shortfall was driven by lower than expected gross profit, higher than expected SG&A and lower than expected Carmax Auto Finance (CAF) income.

Kwas notes that KMX suspended its same-store sales and EPS guidance for fiscal year 2009 (February) because of deteriorating fundamentals. He says KMX's decision to suspend guidance speaks volumes about the volatility in the marketplace.

He expects significant pressure on the shares today. He believes KMX shares will see support around $16. He also believes franchised auto retailers (AutoNation (AN), etc.) will come under meaningful pressure.

WILLIAM BLAIR RAISES ESTIMATES FOR PANERA BREAD

William Blair analyst Sharon Zackfia says Panera Bread (PNRA) raised its second quarter EPS view to $0.48-$0.50 from $0.40-$0.44 on better-than-expected company-owned same-store sales and strong growth in gross profit per transaction. He notes company-owned same-store sales are now seen rising 6.1%-6.4%, vs. 2.1% a year ago.

Meanwhile, she says the company appears to have nicely recovered from last year's gross margin mishaps, as a combination of adroit menu management and pricing yielded above-plan growth in gross profit per transaction. She notes this marks the company's fourth straight quarter of positive traffic gains, despite a difficult economic backdrop.

She raises 2008 EPS estimate by $0.10 to $2.20 and 2009 by $0.10 to $2.55. She reiterates outperform opinion on the stock.


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