Will Dunkin' Brands (DNKN) Stock be Affected Today by Credit Suisse Coverage Initiation?

Dunkin' Brands (DNKN) stock is up after Credit Suisse initiated coverage with an 'outperform' rating and a $56 price target.
By Krysta Michaelides ,

NEW YORK (TheStreet) -- Dunkin' Brands Group (DNKN) - Get Report stock is up 1.54% to $47.42 in morning trading Wednesday after Credit Suisse initiated coverage with an "outperform" rating and a $56 price target.

Although investors are concerned with Dunkin's same-store sales weakness, analysts "see better days ahead on improving macro for low-income consumers, higher menu pricing, and mobile pay and loyalty benefits. Checks indicate that franchises remain enthusiastic about westward expansion, the key to the growth story," Credit Suisse explained.

Although Dunkin' had disappointing 2014 comps, the firm believes that the franchise's domestic unit expansion story remains on track with franchisee profit money and margins hitting all-time highs in 2014.  

Dunkin' is currently in the early stages of loyalty (Perks) expansion, the firm noted, adding that the company has one of the most shareholder-friendly management teams in the industry.  

Analysts anticipate fiscal year earnings of $1.87 in 2015.

The company will report its first quarter results in April. 

Insight from TheStreet's Research Team: 

Brian Sozzi commented on Dunkin' Brands in a recent post on RealMoney.com. Here is what Sozzi had to say about the stock:

New, bold menu items that just make sense: The restaurant industry has long been synonymous with poorly thought-out new menu additions. Remember TGI Friday's Tex-Mex Tower? Or how about Burger King's enormous fried fish sandwich, the Whaler? Those days of silly new items are in the rearview mirror, in large part because big data and good old-fashioned research are helping to understand consumer preferences at a minute level. I received an email from a contact that Dunkin' Brands (DNKN) just introduced a limited-time spicy omelet breakfast sandwich. This seems like a win to me, targeting preferences by many for indulgent breakfast sandwiches with a little kick. The product risks are being minimized and, by extension, so are the risks of holding restaurant stocks.

-Brian Sozzi, '3 Ingredients for Hot Restaurants' originally published 3/3/2015 on RealMoney.com.

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Separately, TheStreet Ratings team rates DUNKIN' BRANDS GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DUNKIN' BRANDS GROUP INC (DNKN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

You can view the full analysis from the report here: DNKN Ratings Report

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