In this chart of PNRA, above, we can see that the $180 level has been a "line" where big swings have started or stopped. PNRA has recently rallied to the underside of the 200-day moving average, which is now at $180. Also, the On-Balance-Volume (OBV) line is generally trending lower and the Moving Average Convergence Divergence (MACD) oscillator is below zero. The bottom-line short-term view is that PNRA is vulnerable to further weakness.
This longer view of PNRA, above, shows prices below the 40-week moving average. The OBV line is weakening on this time frame, suggesting a liquidation of longs. Also, the MACD oscillator has rolled over and is heading to below zero. With a weakening chart picture for PNRA, traders should take appropriate action -- getting out of longs and then probing the short side.
TheStreet Ratings team rates PANERA BREAD CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate PANERA BREAD CO (PNRA) a BUY. This is driven by multiple strengths, 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, largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PNRA's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, PANERA BREAD CO has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- After a year of stock price fluctuations, the net result is that PNRA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- PANERA BREAD CO's earnings per share declined by 13.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PANERA BREAD CO reported lower earnings of $6.65 versus $6.82 in the prior year. For the next year, the market is expecting a contraction of 8.0% in earnings ($6.12 versus $6.65).
- You can view the full analysis from the report here: PNRA
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.