Panera Bread Sells For $7.5 Billion, But It's Not Likely to Change

Andrew Cummings
April 6, 2017

Under the terms of the transaction, JAB BV, the investment vehicle executing the transaction for JAB, would pay $315 a share, representing a premium of 30 percent to Panera's 30-day volume-weighted average stock price as of March 31, the last trading day before media reports that Panera was exploring a potential sale. Moreover, Piper Jaffray issued Downgrade rating for the stock on 5-Apr-17.

Price Target is basically a projection of future price of a company's stock by the expert analysis of investment analysts or investment firms. This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth.

Valuation multiples help investors decide whether to enter or exit stock. Jefferies Group LLC increased their price target on Panera Bread from $245.00 to $267.00 and gave the stock a buy rating in a report on Thursday, February 9th. Goldman Sachs Upgrades the stock to Buy on 1/19/17 with no specific Price Target. They now have a United States dollars 290 price target on the stock.

Panera Bread (NASDAQ:PNRA) last posted its quarterly earnings data on Tuesday, February 7th.

Mr. Shaich will continue to lead the company under JAB, and Panera Bread will continue to be headquartered in St. Louis. The stock's price fluctuated within the range of $310.86 - $313.41 during previous trading session.

After 25 years operating as a publicly traded company, Panera Bread will become private and continue to be operated independently by its management team. Strong Sell. Investors might also notice that two months ago the Buy recommendations (1) outnumbered Sell recommendations (0). The prospect of a new competitor is a promising sign, particularly as JAB seems willing to take an active role in the market. Given the same store sales momentum and cresting brand reinvestments, it appears consensus EPS estimates for 2017 and out year may remain solidly below where they could be headed.

JAB will also assume about US$340 million of Panera's net debt, valuing the deal at US$7.5 billion, the companies said in a joint statement. A total of 12.16M shares exchanged hands, whereas the company's average trading volume stands at 673,719 shares. Over the years, Panera has gone against the US food industry's conventional wisdom, with one example being a "no-no list" of additives and preservatives the company pledged to remove from its menu items. The share price has moved forward from its 20 days moving average 26.60% and positively from its 50 days moving average 34.17%.

A moving average (MA) is a trend-following or lagging indicator because it is based on past prices. As far as the returns are concern, the return on equity was recorded as 41.60% and return on investment was 21.70% while its return on asset stayed at 11.30%.

When we have a peek on stock's historical trends we come to know that, the stock has climbed 22.61% in the past one week and soared 35.84% during previous one month drive, the stock went up 50.89% during past quarter. Over the past month the firm's stock is 35.84%, 50.89% for the last quarter, 62.42% for the past six-months and 48.24% for the a year ago.

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