Good morning. Here’s your daily equity research round up from the Street.
Panera Bread Company (PNRA): KeyBanc initiated coverage of Panera with a Buy rating and a $175 price target. They consider the company a dominant brand in its niche, and believe it will be able to sustain 20 per cent annual EPS growth. That growth will come from consistent expansion and increased sales leverage.
Progressive Corp. (PGR): Morgan Stanley is concerned about the stock’s valuation, which implies strong EPS growth and returns. The bank sees limited potential for earnings growth over the next two years as margins are pressured. Their base case is lowered to $17 dollars, reflecting a risk-return skewed to the downside.
VMware (VMW): The bank is bullish on the long term prospects of the company, with a 12 month price target of $125. They see the cloud infrastructure company as playing a key role in data centre modernization and the ongoing shift to the cloud. In the near term, UBS is cutting estimates on FX headwinds and CFO transition.
Global Pharmaceutical Earnings Preview: Jefferies expects a rough season overall for the pharmaceutical industry due to patent expiration, European pricing, and currency headwinds. Analyst Jeffrey Holford cites Abbot and Novo Nordisk as the best plays for 2Q earnings, and says AstraZeneca, GSK, Bristol-Myers, Novartis, and Pfizer are likely to disappoint.
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