Panera Bread Co. (PNRA)
Analyst action: Morgan Stanley upgraded Panera Bread from Equal-weight to Overweight due to strength in the industry. The firm now has a price target of $168 on the stock.
Recent headlines: Panera has unveiled plans to further expand in Canada. I think this is a good move, given its status as an upcomingking of fast food. Although the brand already has a few restaurants in Canada, five more locations are set to open in 2012. Panera is also looking to aggressively expand in the U.S. As described here, Panera wants more restaurants in urban hotspots, especially Manhattan. The company may also create stores with drive-through spots. In other news, Panera will no longer work with Mullen, which did creative work for the company. Investors should keep certainly keep an eye out to see where Panera goes with its advertising now.
Competitors: Compared to Chipotle Mexican Grill (BAGL), and Starbucks (SBUX), Panera offers average price to earnings, price/earnings to growth, and price to sales ratios. The company's margins (35.07% gross and 12.46% operating) also fall in the middle of those other companies.
Cash flows: $17.1 million flowed out of Panera during 2010, and $48.4 million flowed out during the first three quarters of 2011. That's been mostly due to aggressive investment outflows, however.
Apple Inc. (AAPL)
Analyst action: Jefferies raised its price target for Apple to $550. The firm has a Buy rating on the stock and is anticipating momentum from the iPhone 4S.
Recent headlines: Apple's been experiencing a number of calamities in Asia. For instance, an iPhone sellout in Beijing prompted a riot of sorts, which involved the throwing of eggs at Apple's store. Apple has also been required to disable the WiFi part of iPhones in order to comply with the Chinese government. Meanwhile, Apple is coming under attack from human rights activists due to the inhumane conditions at its (Asian) suppliers. While Apple is trying to rectify the situation, some backlash could be on the way.
Competitors: Compared to Google (GOOG), Hewlett-Packard (HPQ) and Research In Motion (RIMM), Apple has above-average price to earnings and price to sales ratios but a low price/earnings to growth ratio. That's a sign of Apple's high expected growth, and margins for Apple are also pretty good. Those numbers are 40.48% gross and 31.22% operating.
Cash flows: $1.446 billion flowed out of Apple during fiscal year 2011. That was mostly caused by the company's aggressive investment activities, however.
Other interesting statistics: Apple has a quarterly revenue growth of 39% year over year.
The Home Depot Inc. (HD)
Analyst action: Goldman Sachs raised its price target and earnings estimates for Home Depot. The new price target is $45, although the firm's rating on the stock is still Neutral.
Recent headlines: Home Depot has announced plans to hire over 70,000 temporary employees for its busy season. That's fairly routine for Home Depot, which seeks to take advantage of the various home improvement activities that occur during the spring, although the company is adding a bit of a twist. Jobs will start in February in order to beat out other employers that make use of seasonal hiring. That's a wise move because it will allow Home Depot to lock down the best candidates.
Competitors: Compared to Lowe's (LOW), Home Depot has about the same price to earnings and price/earnings to growth ratios, although its price to sales ratio is much higher. That in part has to do with Home Depot's superior operating margin of 9.21%.
Cash flows: $876 million flowed out of Home Depot during fiscal year 2011, although $1.689 billion flowed in during the three quarters after that. Home Depot has done a fine job of improving its operating cash flows.
Other interesting statistics: Home Depot has a dividend yield of 2.70%.
Discover Financial Services (DFS)
Analyst action: Lower costs and improved delinquency rates have led Goldman Sachs to increase its price target and earnings estimates for Discover Financial. The new price target is $30, although the firm's rating on the stock is still Neutral.
Recent headlines: Discover has unveiled plans to offer new loans tailored to students in certain types of graduate schools. Here's what Steve Olszewski, Discover Student Loans' vice president, had to say: "By redesigning the Discover Student Loans website and adding more loan options, Discover continues to build on its commitment to help students cover the necessary costs of an education where savings, grants and federal loans fall short." We think this will be a rather profitable move for Discover.
Competitors: Compared to American Express (AXP), Mastercard (MA), and Visa (V), Discover has the lowest price to earnings and price/earnings to growth ratios. Meanwhile, its margins (87.32% gross and 50.66% operating) are about average for the industry.
Cash flows: $7.921 billion flowed out of Discover during fiscal year 2010, and $1.141 billion flowed out of Discover during the three quarters after that. Aggressive investing activities have been a major cause.
Other interesting statistics: Discover Financial Services has a quarterly revenue growth of 40.30% year over year.
The Dow Chemical Company (DOW)
Analyst action: Goldman Sachs raised its price target and earnings estimates for Dow Chemical due to lower prices for ethane. The new price target for Dow Chemical is $38, although the firm still has a Neutral rating on the stock.
Recent headlines: Many investors are getting excited about a new product from Dow Chemical called Dow Powerhouse Solar Shingles. This roof installment seeks to create electricity using solar power, and Dow Chemical has announced that three roofing companies will be authorized to install the new devices. Here's what Dow Solar's Jane Palmieri had to say: "Our association with Academy Roofing, B&M Roofing of Colorado Inc., and D&D Roofing allow us to bring the latest innovation in residential solar products to Colorado homeowners… We designed our solar product around the principle that the only people homeowners want and need on their roof are professional roofing contractors."
Competitors: Compared to BASF (BASFY.PK) and DuPont (DD), Dow Chemical offers a low price to sales ratio, although its price to earnings is relatively high. That can be attributed to Dow Chemical's poor margins — 15.77% gross and 7.55% operating.
Other interesting statistics: Dow Chemical has a beta of 3.00 and dividend yield of 3.10%.