The Bulls Are Out on Dunkin’ Brands

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Analysts at UBS highlighted some positive facets of the company on Tuesday when they reiterated their “Buy” rating and raised their price target from $36 to $40, 9.4 percent above Monday’s closing price. The analysts set 2013 and 2014 earnings growth targets of 20 and 19 percent, respectively.

“With our new target, we assume an 18% EPS growth rate over the next 3 years due to accelerated unit growth, and impending customer loyalty/mobile payment initiatives. We continue to believe investors will be willing to pay a premium multiple for companies that exhibit such highly visible and consistent EPS growth,” commented the analysts.

Here’s what that EPS growth looks like on an annual basis:

Fiscal Year 2009 2010 2011
Revenue ($) in millions 538.07 577.14 628.20
Diluted EPS ($) 0.55 0.42 0.35

And on a quarterly basis:

Quarter Sep. 30, 2011 Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012
Revenue ($)in millions 163.51 168.50 152.37 172.39 171.72
Diluted EPS($) 0.06 0.05 0.21 0.15 0.26

At a glance, not so consistent and not so upwardly mobile — EPS has actually fallen for each of the past three years, and growth has bounced up and down on a quarterly basis. But the platform for consistent growth is there…

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