Can Dunkin’ Brands Continue to Move Higher?
With shares of Dunkin’ Brands (NASDAQ:DNKN) trading around $45, is DNKN an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Dunkin’ Brands owns, operates, and franchises quick service restaurants under the Dunkin’ Donuts and Baskin-Robbins brands worldwide. The company operates in four segments, including Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer coffee, donuts, bagels, ice cream, frozen beverages, baked goods, and related products. The increasing popularity of the product offerings by Dunkin’ Brands is fueling excellent growth for the company.
Dunkin’ Brands is hoping that as Europe recovers from its recession, its consumers will be increasingly interested in their favorite Dunkin’ indulgences again, and the brand is especially gunning for Germany. Bloomberg reports that Dunkin’ Donuts initially came to Deutschland in 1999 and now has 35 shops there. As Europe bounces back from the recession, the donut company is hoping to capitalize on the region’s biggest economy even more, expecting to increase its shop number to 150 within five years’ time. The company is confident that the region’s inhabitants, especially those in places like Hanover, Stuttgart, Munich, and Nuremberg will be eager to jump aboard the coffee and Boston Kreme donut chain once their disposable income rises.