The firm said it lowered its numbers on the Dunkin Donuts/Baskin Robbins operator based on the company's new growth expectations.
On Thursday, Dunkin issued weak guidance for the 2015 fiscal year.
"As we lamented following the Analyst Day, Dunkin continues to face highly promotional and discount-oriented competition, as well as sluggish consumer spending growth. We like Dunkin's multiple same store sales drivers, but none have provided a silver bullet to accelerating and sustaining growth," Jefferies said.
Shares of Dunkin Brands are lower by 0.29% to $42.92 at the start of trading this morning.
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 several positive factors, 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, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DUNKIN' BRANDS GROUP INC has improved earnings per share by 40.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DUNKIN' BRANDS GROUP INC increased its bottom line by earning $1.36 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.36).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 36.0% when compared to the same quarter one year prior, rising from $40.22 million to $54.70 million.
- The gross profit margin for DUNKIN' BRANDS GROUP INC is currently very high, coming in at 80.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.39% significantly outperformed against the industry average.
- Net operating cash flow has remained constant at $56.18 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -17.67%.
- You can view the full analysis from the report here: DNKN Ratings Report