MCD - Dunkin' Brands: Undervalued As Rebranding Brightens The Outlook
Investment Thesis
With comparable sales stagnating in 2017, Dunkin' Brands Group, Inc. (DNKN) unveiled a three-year plan for recovery. A menu simplification drive and new restaurant concepts rolled out, but sales failed to recover. A rebranding initiative followed with a new beverage-led focus to strategy. The flexible branding makes up for the fast-moving consumer choices, though it plunges the company headlong into ‘coffee wars’ against the leading peers such as Starbucks Corporation (SBUX). However, the stock continues to underperform, and its forward PE has not yet reached the level in 2017.