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What to Expect from Dunkin' Brands' 4Q16 Earnings

PART:
1 2 3 4 5 6
Part 4
What to Expect from Dunkin' Brands' 4Q16 Earnings PART 4 OF 6

Why Are Analysts Optimistic about Dunkin’ Brands’ 4Q16 Earnings?

Earnings per share

So far in this series, we’ve looked at Dunkin’ Brands’ (DNKN) estimated revenue, sources of revenue, and estimated EBIT (earnings before interest and tax) margins.

In this article, we’ll take a look at analysts’ EPS (earnings per share) estimates for the company.

Why Are Analysts Optimistic about Dunkin&#8217; Brands&#8217; 4Q16 Earnings?

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4Q16 EPS estimates

Analysts expect Dunkin’ Brands to post EPS of $0.61 in 4Q16, representing a rise of 17.3% from $0.52 in 4Q15. This rise in EPS is expected to be driven by revenue growth, the expansion of the company’s EBIT margin, and share repurchases in the last 12 months. Since the beginning of 2016, the company has repurchased shares worth $55 million. Share repurchases reduce the number of a company’s shares outstanding, boosting its EPS.

Peer comparisons

During the period, Dunkin’ Brands’ peer Starbucks (SBUX) posted a rise of 13% in its EPS. Dunkin’s other peer Panera Bread (PNRA) is expected to post an EPS rise of 6.2%.

Outlook

For the next four quarters, analysts are expecting Dunkin’ Brands to post EPS of $2.39, representing a rise of 12.2% from $2.13 in the corresponding four quarters of the previous year. This EPS growth is expected to be driven by revenue growth, EBIT margin expansion, and share repurchases.

Dividends

Analysts expect Dunkin’ to pay dividends of $0.3 in 4Q16, taking its total for 2016 to $1.2, a rise of 10% from $1.08 in 2015. Analysts expect the company to pay total dividends of $1.33 in 2017.

Next, we’ll look at Dunkin’ Brands’ valuation multiple.

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