Panera Bread (PNRA ), which owns and operates about 330 bakery-cafés in 28 states, is your typical Peter Lynch stock. He favors rapidly growing companies in businesses that consumers are familiar with, such as Panera--a well-managed restaurant catering to families. Panera has heated up from 30 on Sept. 10 to 46 on Nov. 14, after having been as low as 11 in January. Lynch, star spokesman for Fidelity Investments and its former ace stock picker, holds nearly 5% of the stock in his personal portfolio. The Richmond Heights (Mo.) company, which once owned the Au Bon Pain chain, serves its own brand of bread and other food--at an average check of $7, compared with $12 at rival eateries.
The company handily beat Street estimates with its record third-quarter sales and earnings results. Annualized sales for company-owned and franchised restaurants climbed 6%, to $1.7 million. This year, Panera opened 70 new restaurants--at which the average sales were even higher, running at an annual rate of about $1.9 million. It plans to up its restaurant roster to 455 in 2002--128 company-owned and 327 franchised.
So analyst Selman Akyol of investment firm Stifel Nicolaus, who rates the stock a buy with a 2001 price target of 50, raised his 2001 earnings estimate to 87 cents a share, on sales of $198.8 million, and his 2002 numbers to $1.22 and $243.5 million. Last year, Panera earned 52 cents, on sales of $151 million. Akyol boosted his estimates based on cafe openings and continued strong same-store sales.
By Gene G. Marcial