The Zacks Analyst Blog Highlights: Dunkin Brands Group, Cheesecake Factory, Starbucks, Red Robin Gourmet Burgers and Altera

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Oct 22, 2012, 09:30 ET

CHICAGO, Ill., Oct. 22, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Dunkin Brands Group, Inc. (Nasdaq:DNKN), The Cheesecake Factory Incorporated (Nasdaq:CAKE), Starbucks Corp. (Nasdaq:SBUX), Red Robin Gourmet Burgers, Inc. (Nasdaq:RRGB) and Altera Corporation (Nasdaq:ALTR).

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Here are highlights from Friday's Analyst Blog:

Dunkin' Donuts on U.S. Expansion Spree

Dunkin' Donuts, an operational arm of Dunkin Brands Group, Inc. (Nasdaq:DNKN), recently penned a multi-unit store development deal with one of its existing franchisees - Sizzling Donuts, LLC. As per the deal, Dunkin' will unveil 16 new restaurants in Utah in the coming years. The restaurants are due to be opened in Salt Lake City, with the first restaurant slated to open in 2013 and the rest by 2018.

As a point of reference, the move is part of the company's goal to double its presence in the U.S. over the next 20 years. Dunkin' is focused on a strategy to seize growth opportunities over its competitors by catering to the consumer needs of individual markets. The company is currently expanding through single and multi-unit opportunities.

The promising restaurant industry in Utah continues to drive the U.S. economy. In 2012, total revenue from the restaurant sector in Utah is projected to be around $3.3 billion. Salt Lake City, the capital and most populous city in Utah, is known for its varied shopping destinations. The peer companies of Dunkin Brands such as The Cheesecake Factory Incorporated (Nasdaq:CAKE) and Starbucks Corp. (Nasdaq:SBUX) have been active in the city for years.

Sizzling Donuts, LLC is a subsidiary of Sizzling Platter, LLC, which also franchises one of Dunkin's peers -

Red Robin Gourmet Burgers, Inc. (Nasdaq: RRGB ) .

The company first joined hands with Sizzling Donuts, LLC earlier in 2012 to open 11 new restaurants in Denver, Colorado, and eight in El Paso, Texas, in the coming years. Management believes that franchise opportunities still exist in the Utah market, particularly in the cities of Northern Utah and Nevada.

Earlier this month, Dunkin' inked multi-unit store development deal with new franchisees Dean Kreher and Ted Pierce for three restaurants in St. Louis, Missouri by 2015. Last month, Dunkin' also joined hands with a franchise group to open two units in Ohio and inked a deal with two other franchise groups to open three units in Illinois. In addition, the company entered into multi-unit store development agreements with several franchise groups for 29 new units in Houston and Waco in Texas.

In order to be competitive and innovative, Dunkin' offers services through various types of real estate formats including free-standing restaurants, end caps, in-line sites, gas and convenience, travel plazas, on-university campus and others. Recently, Dunkin' opened its outlets at 10 college campuses across the Northeast, Mid-Atlantic and Southern United States.

Dunkin' is the market leader in the coffee, donut, bagel and muffin categories. The company operates more than 10,000 restaurants worldwide, including more than 7,000 restaurants in 36 states as well as the District of Columbia, and in more than 3,000 international locations in 33 countries.

Dunkin Brands is expected to release its third-quarter 2012 results on October 25. The Zacks Consensus Estimate for the third quarter is currently pegged at 35 cents per share.

We currently have a long-term Neutral recommendation on the stock. Also, it carries a short-term Zacks #3 Rank (Hold).

Earnings Preview: Altera

We continue to maintain a Neutral recommendation on Altera Corporation (Nasdaq:ALTR) ahead of its third quarter 2012 results, expected on October 23, 2012.

Last month, Altera updated its guidance for the third quarter of 2012. Altera expects revenue growth of 2% – 6% on a sequential basis, in line with the guidance provided during the second quarter results. This implies a revenue guidance of $437.5 million – $452.9 million.

Altera continues to see traction in the 28-nanometer node and expects revenue from this node to exceed $20 million in the third quarter. Revenue from 40-nanometer node is also expected to grow sequentially.

New products are expected to be the growth drivers for the third quarter with sales of both 40nm and 28nm products estimated to rise substantially.

End-market wise, Telecom and Wireless markets are expected to witness growth. Industrial Automation, Military and Automotive segment is also expected to increase, driven primarily by Military and Automotive. Networking, Computer and Storage is expected to be down.

Earnings estimates for fiscal 2012 have been static over the last few days as the company reiterated its guidance for the third quarter.

In July, Altera reported better-than-expected second quarter results. Altera reported a net income of $162.7 million or 50 cents per diluted share, which easily beat the Zacks Consensus Estimate of 39 cents per share.

Altera returned to sequential quarterly growth after three quarters of pullback in customer inventory. Most customers ended their inventory destocking programs and returned to their normal purchase levels.

On an average, Altera has surpassed the Zacks Consensus Estimate by 7.95% in the last four quarters. We expect the company to report in line results for the third quarter. The current Zacks Consensus Estimate for third quarter 2012 is 46 cents with no movement in either direction in the last sixty days.

Altera has a robust pipeline of 28 nanometer products, which it believes will maintain the growth momentum in the upcoming quarters. Meanwhile, Altera increased its quarterly dividend by 2 cents to 10 cents per share.

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