Dunkin’ Brands (DNKN) Downgraded to Sell at Zacks Investment Research

Zacks Investment Research lowered shares of Dunkin’ Brands (NASDAQ:DNKN) from a hold rating to a sell rating in a research report sent to investors on Wednesday.

According to Zacks, “Dunkin’ Brands’ shares have underperformed the industry in the past three months. The company's international comps growth has suffered over the past few years at both Dunkin’ Donuts and Baskin Robbins divisions as discretionary spending in some parts of the world is under pressure. Meanwhile, the United States ice cream industry is also shrinking gradually due to a shift to healthier substitutes, making Baskin Robbins suffer here too. Even so, Dunkin' Brands’ franchised business model, various sales initiatives like product launches, ongoing loyalty program along with enhanced digital offerings bode well. Increased focus on establishing itself as a beverage leader should also aid sales, going forward. Yet, intense competition from larger fast casual companies and a choppy sales environment in the United States might pressurize the top-line.”

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DNKN has been the topic of several other reports. Morgan Stanley dropped their target price on Dunkin’ Brands from $69.00 to $67.00 and set an equal weight rating on the stock in a research note on Monday, March 26th. BidaskClub cut Dunkin’ Brands from a sell rating to a strong sell rating in a research report on Friday, March 16th. Piper Jaffray reaffirmed a neutral rating and set a $62.00 price target (up previously from $59.00) on shares of Dunkin’ Brands in a research report on Thursday, February 22nd. William Blair raised Dunkin’ Brands from a market perform rating to an outperform rating in a research report on Monday, January 22nd. Finally, Barclays reaffirmed an overweight rating and set a $70.00 price target (up previously from $63.00) on shares of Dunkin’ Brands in a research report on Tuesday, January 16th. Two analysts have rated the stock with a sell rating, nine have assigned a hold rating and nine have issued a buy rating to the stock. The stock currently has an average rating of Hold and an average target price of $64.37.

Shares of DNKN stock opened at $60.62 on Wednesday. Dunkin’ Brands has a 1-year low of $50.89 and a 1-year high of $68.45. The company has a current ratio of 2.79, a quick ratio of 2.79 and a debt-to-equity ratio of 361.71. The firm has a market cap of $5,008.90, a P/E ratio of 24.92, a price-to-earnings-growth ratio of 1.71 and a beta of 0.30.

Dunkin’ Brands (NASDAQ:DNKN) last announced its earnings results on Tuesday, February 6th. The restaurant operator reported $0.64 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.63 by $0.01. Dunkin’ Brands had a negative return on equity of 190.44% and a net margin of 40.77%. The firm had revenue of $227.10 million for the quarter, compared to the consensus estimate of $220.54 million. During the same period in the previous year, the business earned $0.64 EPS. The firm’s revenue for the quarter was up 5.3% on a year-over-year basis. equities research analysts forecast that Dunkin’ Brands will post 2.66 earnings per share for the current fiscal year.

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, March 21st. Stockholders of record on Monday, March 12th were issued a $0.3475 dividend. This represents a $1.39 annualized dividend and a dividend yield of 2.29%. The ex-dividend date was Friday, March 9th. This is a boost from Dunkin’ Brands’s previous quarterly dividend of $0.32. Dunkin’ Brands’s payout ratio is 57.20%.

In other news, CEO Nigel Travis sold 57,296 shares of the business’s stock in a transaction dated Tuesday, February 20th. The stock was sold at an average price of $63.24, for a total value of $3,623,399.04. Following the completion of the transaction, the chief executive officer now owns 327,957 shares of the company’s stock, valued at approximately $20,740,000.68. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider John L. Clare sold 13,388 shares of the business’s stock in a transaction dated Monday, February 26th. The shares were sold at an average price of $62.02, for a total value of $830,323.76. Following the completion of the transaction, the insider now directly owns 29,772 shares of the company’s stock, valued at approximately $1,846,459.44. The disclosure for this sale can be found here. In the last three months, insiders sold 455,581 shares of company stock valued at $28,320,199. Insiders own 3.00% of the company’s stock.

Several hedge funds have recently modified their holdings of the company. BlackRock Inc. lifted its holdings in shares of Dunkin’ Brands by 0.7% in the 4th quarter. BlackRock Inc. now owns 7,322,621 shares of the restaurant operator’s stock valued at $472,088,000 after buying an additional 51,795 shares during the period. Jackson Square Partners LLC lifted its holdings in shares of Dunkin’ Brands by 2.7% in the 4th quarter. Jackson Square Partners LLC now owns 1,818,261 shares of the restaurant operator’s stock valued at $117,223,000 after buying an additional 47,703 shares during the period. First Manhattan Co. lifted its holdings in shares of Dunkin’ Brands by 9.4% in the 4th quarter. First Manhattan Co. now owns 1,601,113 shares of the restaurant operator’s stock valued at $103,223,000 after buying an additional 137,051 shares during the period. Vaughan Nelson Investment Management L.P. lifted its holdings in shares of Dunkin’ Brands by 9.4% in the 4th quarter. Vaughan Nelson Investment Management L.P. now owns 887,675 shares of the restaurant operator’s stock valued at $57,229,000 after buying an additional 75,975 shares during the period. Finally, Geode Capital Management LLC lifted its holdings in shares of Dunkin’ Brands by 0.3% in the 4th quarter. Geode Capital Management LLC now owns 771,782 shares of the restaurant operator’s stock valued at $49,756,000 after buying an additional 2,573 shares during the period. 97.14% of the stock is owned by institutional investors and hedge funds.

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About Dunkin’ Brands

Dunkin' Brands Group, Inc, together with its subsidiaries, develops, franchises, and licenses quick service restaurants worldwide. The company operates through four segments: Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer hot and cold coffee, baked goods, donuts, bagels, muffins, breakfast sandwiches, hard and soft serve ice creams, frozen yogurts, shakes, malts, floats, and cakes.

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