Panera Bread Co.
“Consumers are opening their wallets to eat here.”
Panera Bread Co. (NASDAQ:PNRA) recently has popped up on my screens, and it could turn out to be the ultimate growth stock in 2012.
I’m not sure if it’s the fresh bakery items, the sandwiches or what, but people are flocking to Panera stores and pushed sales 22% higher in the past quarter. Thanks to this strong performance, the stock hit a new 52-week high and 17 analysts have lifted their earnings estimates in the past 30 days.
For the fourth quarter, the specialty eatery is expected to see a 16.4% rise in sales and a 16% increase in earnings.
When you see sales rising in this fashion and analysts scrambling to lift their outlooks, it usually means the company is in for a great quarter and it’ll beat those estimates. Big earnings surprises spell shareholder profits, and that’s why I rank PNRA stock as a strong buy right now.
“One of the restaurant industry’s best-performing companies.”
Panera has changed the idea of “fast food” with quality products and an elegant atmosphere. Restaurant sales are continuing to climb for these types of chains, and revenue growth looks to remain on the fast track.
In many ways, Panera reminds me of Starbucks (NASDAQ:SBUX) and how it changed the way we buy and drink coffee. Their strategy is obviously working, as it remains popular at peak times, during off hours, on down stock market days, even when consumer confidence is low.
I believe the market now recognizes that rapid growth at Panera Bread is intact for 2012, and investors are willing to pay higher multiples for solid growers with strong franchises.
As one of the restaurant industry’s best-performing companies, Panera should continue to enjoy a loyal customer base through its high-quality products and inviting atmosphere in its bakeries.