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American Express Looks Appealing But Panera Needs a Pullback

These are our articles posted on Seeking Alpha. Click "READ MORE" if you would like to read the rest of the articles.

American Express Looks Like A Great Buy Right Now

Summary

  • American Express posted fair 1st quarter FY2016 results for period ended 31 March 2016, and reaffirmed its earnings guidance for FY2016.
  • The company’s business fundamentals are still going strong.
  • Investors should look past the short-term headwinds of losing the exclusive credit card partnership with Costco and focus on other areas of organic growth.
  • Buying this stock is the right strategy as the company has implemented a strong share repurchase program.

American Express has gone through some tough times but now may be a good time to invest.

American Express (NYSE:AXP), more popularly known as Amex, is an American global financial services company specializing in transaction payment services via credit card offerings. The share price has been trending upwards since 2012 from $47 to an all-time high of $96 at the end of July 2014. The share price has suffered a pullback since end of July 2014. The stock price hit a recent low of $52 per share in February 2016 before recovering. Currently, it is trading around $64 per share, which is a great entry price given its solid business fundamentals... READ MORE



Panera Is A Great Company But Waiting For A Pullback Might Be Best

Summary

  • Panera’s first quarter results have undeniably raised expectations enormously.
  • Assuming the share price stays the same, the market is forecasting a whopping 27% increase in Panera’s earnings.
  • Panera’s fair value is around $200 in my model with conservative assumptions.

In my previous article on Panera Bread (NASDAQ:PNRA), I discussed trends demonstrating the success of Panera 2.0 and considered how food safety issues at Chipotle (NYSE:CMG) may have contributed to the comp sales in the first quarter. Certainly Panera looks well positioned to make the most of the sales and profit opportunity at its disposal following the decline of Chipotle, but is the stock worth buying right now? Are all potential tailwinds already priced into the stock?

Panera's first quarter results have undeniably raised expectations disproportionately. The 6.2% increase in comp sales at company-owned cafes can be viewed as an anomaly in the restaurant industry. According to the management, Panera outperformed the Black Box all-industry composite by a record 650 basis points. Consequently, the market is now expecting Panera to live up to high expectations, which means that even if the company outperforms the industry but reports comps below 5%, for example, Mr. Market won't be too pleased... READ MORE

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