The Bulls Are Out on Dunkin’ Brands

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…