Miller Tabak: Dunkin Brands Top Pick For 2015, Shares Poised To Rise

Stephen Anderson of Miller Tabak & Co named on Monday Dunkin Brands Group Inc (NASDAQ: DNKN) as a top pick for 2015 as the same-restaurant sales are expected to grow by 2.6 percent in 2015 and 3.2 percent for 2016.

Anderson notes that the company will benefit from an uptick in lunch and dinner traffic, which unlike breakfast have been losing traffic within the segment while continued job gains will increase demand for breakfast. Dunkin Brands will also benefit from a reduction in fuel prices, especially among the company's core Northeast market.

The company may also see a boost from new menu innovation including Dark Roast Coffee and Angus Steak sandwiches, which are already off to strong starts based on Anderson's observations. The analyst also sees the company's DDPerks program contributing to a same-restaurant sales boost of 50 to 75 basis points, while a further 25 basis point upside could stem from mobile payments integrated into the loyalty program.

Shares are Buy rated with a $52 price target.