NEW YORK (TheStreet) -- Panera Bread (PNRA) stock climbed 18% during the past three months and may post more gains, one analyst said, even though its high-tech upgrade has taken longer to complete than some investors wanted.
"We think shares are slightly undervalued," said Morningstar analyst RJ Hottovy, who maintains a hold rating. "It's had a nice ride over the past two months and you could have some more volatility over the next two quarters, but it's a name that's ahead of the curve in terms of what consumers are looking for."
Panera Bread has been rolling out a slew of innovations at stores, from iPad ordering platforms in restaurants to other technological upgrades, in a project known as Panera 2.0.
Ron Shaich, the company's chairman and CEO, said Panera 2.0 is "an integrated, comprehensive, end-to-end solution that we believe will reduce friction such as wait times, improve order accuracy, and minimize or eliminate crowding," in an April 2014 news release announcing the launch of the project.
But the effects of this ambitious plan haven't come to fruition as fast as investors had hoped.
"We believe that the fruits of [Panera 2.0] will not be reaped for at least another eight months or so," Cramer, the portfolio manager, and research director Jack Mohr wrote. "We are more comfortable with companies that have the ability to capture the tailwinds of an improving international economic and currency environment, and are less inclined to stick with those that are leveraged to a weakening retail sales picture."