* Cuts Panera to "underweight" from "overweight"
* Cuts Sonic Corp to "neutral" from "overweight"
* Cuts Panera price target to $129 from $165
* Panera shares down as much as 3 pct, Sonic falls 6 pct
July 16 Piper Jaffray downgraded restaurant
chain Panera Bread Co by two notches citing increased
risk in the execution of its plans due to recent management
transitions, sending its shares down as much as 3 percent.
The brokerage also downgraded drive-in restaurant chain
Sonic Corp to "neutral" from "overweight" on valuation
concerns. Sonic shares fell 6 percent to $9.88 on the Nasdaq on
Panera has been undergoing a reshuffle at its top recently.
In April, it appointed an interim chief financial officer and
also named a new chief operating officer. In
March, it announced Bill Moreton and Ron Shaich would become
The brokerage, which cut its rating on Panera to
"underweight" from "overweight", said it sees "a high degree of
execution risks until executive positions are filled."
Piper Jaffray also cut its price target on the company's
stock to $129 from $165, but conceded its downgrade may be
construed as "contrarian" given Panera's strong balance sheet,
positive same-store sales trends and a healthy unit growth.
"In the short-term we do very strongly believe our full-year
2012 estimates remain achievable," analyst Nicole Regan wrote in
a client note.
However, Regan said she had reduced confidence about the
company's future due to a number of long-term factors including
its product mix and comparable sales trends, besides the overall
strategic and tactical execution risks.
For Sonic, Regan said an eventual return to unit growth
could be the next catalyst that will drive its shares higher.
Shares of the St. Louis-based Panera, one of the restaurant
industry's best performing companies, fell as much as 3 percent
to $143.60 on the Nasdaq.