Susquehanna International Group analyst Rachael Rothman upgraded

Panera Bread Company

(NASDAQ:

PNRA

) from Neutral to Positive and lowered the price target from $188.00 to $184.00 following a drop in share prices after first quarter earnings.

Summary of First Quarter 2014 Results

Panera reported first quarter 2014 results on Tuesday. EPS came in at $1.55 versus the estimated $1.52. Earnings per share were down five percent from the same quarter last year.

Revenue increased eight percent in the quarter to $605 million. Panera reported company-owned new bakery café AWS of $55,new richmond westconsin credit union230 and company-owned net bakery-café sales up 0.1 percent.

Management is looking for second quarter EPS of $1.70- $1.76 versus the $1.86 analyst estimate. FY 2014 to $6.80- $7.00 compared with $6.93 analyst estimate.

Susquehanna Upgrades Panera

With shares of Panera 20 percent off recent highs, analyst Rachael Rothman noted the shock from March Analyst Day and lowered guidance with reinvestment extending over a longer period of time.

Rothman wrote, "Panera has done a better job of quantifying the capital, labor and G&A investments it is making to support the rollout of its new Panera 2.0 throughput and customer service initiatives, than it has done quantifying the potential upside. As a result, EPS estimates have moved lower as the Street has factored in the associated costs without commensurate expectations for material topline upside, establishing a low bar and setting the company up for what could be numerous quarters of "beat and raise" throughout 2015 and 2016. The setup of quantified costs with little credit given for potential upside, combined with the pullback in the multiple makes for a compelling risk/ reward."

Shares of Panera closed at $152.97 on Wednesday and is currently trading at $156.95, up 2.60 percent.

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