Академический Документы
Профессиональный Документы
Культура Документы
other product operations segment, which supplies fresh dough and other products daily to
Company-owned and franchise-operated bakery-cafes, consist of 22 Company-owned and two
franchise-operated fresh dough facilities, located throughout the United States and one in
Ontario, Canada.
Company bakery-cafe operations:
The Companys bakery-cafes are located in urban, suburban, strip mall and regional mall
locations. The Company offers breakfast, lunch, gathering place, dinner, and take home through
both on premise sales and off-premise Panera Catering. Panera Catering is a nation-wide catering
service that provides breakfast assortments, sandwiches, salads, soups, pasta dishes, drinks and
bakery items. Panera Catering is supported by a national sales infrastructure that includes an online ordering system. The menu items include baked bagels, breads, muffins, scones, rolls, and
sweet goods, made-to-order sandwiches, soups, salads, pasta dishes and roasted coffees and cafe
beverages, such as hot or cold espresso and cappuccino drinks and smoothies. During the fiscal
year ended December 31, 2013, the Company introduced Spinach Power Salad, Bistro French
Onion Soup, Superfruit Power Smoothie with Ginseng, Rustic Penne Bolognese, Pesto
Sacchettini, Tortellini Alfredo, Roasted Turkey & Sun-Dried Tomato Pesto Breakfast Sandwich,
cheese babka, Shrimp Salad Roll, Chilled Shrimp and Soba Noodle Salad, Parmiago Pizza
Bagel, Frozen Cherry Limeade, Rigatoni San Marzano, Vegetarian Autumn Squash Soup,
Roasted Turkey Harvest Wheatberry Salad, Fontina Grilled Cheese Sandwich, the Country Style
Mushroom with Truffle Soup, and a Signature Hot Chocolate with Chocolate Chip
Marshmallows.
Franchise Operations:
The Companys franchisees operated bakery-cafes consist of 37 franchise groups. As of
December 31, 2013, the Company had 910 franchise-operated bakery-cafes operating throughout
the United States and in Ontario, Canada. The Franchise Operations segment is consists of the
operating activities of the franchise business unit, which licenses qualified operators to conduct
business under the Panera Bread or Paradise Bakery & Cafe names and also monitors the
operations of bakery-cafes.
If a company is undervalued both on a DCF and on a relative valuation basis, it scores high on
our scale. Panera Bread posts a VBI score of 6 on our scale, reflecting our "fairly valued" DCF
assessment of the firm, its neutral relative valuation versus peers, and very bullish technicals. We
compare Panera Bread to peers McDonald's (NYSE:MCD), Starbucks (SBUX) and YUM Brands
(NYSE:YUM). In the spirit of transparency, we show how our performance has stacked up
versus peers below:
Investment Considerations:
Investment Highlights:
Panera Bread's business quality (an evaluation of our ValueCreation and ValueRisk
ratings) ranks among the best of the firms in our coverage universe. The firm has been
generating economic value for shareholders with relatively stable operating results for the
past few years, a combination we view very positively.
Panera Bread has an excellent combination of strong free cash flow generation and low
financial leverage. We expect the firm's free cash flow margin to average about 8.4% in
coming years, and the firm had no debt as of last quarter.
Business Quality:
the estimate of its cost of capital of 10.8%. As such, we assign the firm a Value Creation rating
of EXCELLENT. In the chart below, we show the probable path of ROIC in the years ahead
based on the estimated volatility of key drivers behind the measure. The solid gray line reflects
the most likely outcome, in our opinion, and represents the scenario that results in our fair value
estimate.
Firms that generate a free cash flow margin (free cash flow divided by total revenue) above 5%
are usually considered cash cows. Panera Bread's free cash flow margin has averaged about 7.9%
during the past 3 years. As such, we think the firm's cash flow generation is relatively STRONG.
The free cash flow measure shown above is derived by taking cash flow from operations less
capital expenditures and differs from enterprise free cash flow (FCFF), which we use in deriving
our fair value estimate for the company. At Panera Bread, cash flow from operations increased
about 22% from levels registered two years ago, while capital expenditures expanded about 85%
over the same time period.
Valuation Analysis:
Our discounted cash flow model indicates that Panera Bread's shares are worth between $146.00
- $220.00 each. The margin of safety around our fair value estimate is driven by the firm's
LOWValueRisk rating, which is derived from the historical volatility of key valuation drivers.
The estimated fair value of $183 per share represents a price-to earnings (P/E) ratio of about 31.1
times last year's earnings and an implied EV/EBITDA multiple of about 13.3 times last year's
EBITDA. Our model reflects a compound annual revenue growth rate of 13.2% during the next
five years, a pace that is lower than the firm's 3-year historical compound annual growth rate of
16.3%. Our model reflects a 5-year projected average operating margin of 14.3%, which is above
Panera Bread's trailing 3-year average. Beyond year 5, we assume free cash flow will grow at an
annual rate of 5.2% for the next 15 years and 3% in perpetuity. For Panera Bread, we use a
10.8% weighted average cost of capital to discount future free cash flows.
Starbucks has the opportunity to make its stores more profitable. Panera, on the other hand, stands to lose
market share to Starbucks if it isn't careful. However, at least for now, both companies are growing at a healthy
clip.
References:
http://www.fool.com/investing/general/2013/10/21/why-starbucks-wants-to-be-panerasbiggest-competit.
http://www.nasdaq.com/symbol/pnra#ixzz3WNK6Gqyg
http://www.nasdaq.com/symbol/pnra#ixzz3WNDG3qXG
http://www.investopedia.com/terms/s/synergy.asp#ixzz3WMIUgc2B
http://www.nasdaq.com/symbol/pnra/stock-chart#ixzz3WIGNtQRMhttp:
http:// www.nasdaq.com/
http://static.cdn-seekingalpha.com/uploads/2013/5/9/933684-1368124039896415Valuentum.png
http://www.reuters.com/finance/stocks/companyProfile?symbol=PNRA.O
https://www.panerabread.com/en-us/mypanera/find-a-panera.html