Identifying Comparables and Valuation Using PB and PE Panera Bread Company’s book value per share is $27.18 and its forward earnings estimate per share is $6.68. The following information is also available for Panera and a peer group of companies from the restaurant sector.

Ticker Market Cap ($ mil.)
PB Current Forward PE (FY1)
EPS 5-Year Historical Growth Rate ROE (T 4Q) Debt-to-Equity Panera Bread (PNRA). . . . . . . . . . . — — — 26.02% 24.71% 0.00 Tim Hortons (THI) . . . . . . . . . . . . . . $ 8,590 7.31 17.60 15.21% 36.73% 0.47 Papa John’s Intl (PZZA) . . . . . . . . . 1,930 11.18 25.07 17.13% 36.19% 0.64 Einstein Noah (BAGL). . . . . . . . . . . 272 7.59 14.35 2.52% 19.91% 3.28 Chipotle Mexican Grill (CMG) . . . . 16,430 11.25 40.97 33.44% 22.30% 0.00 Dunkin’ Brands (DNKN) . . . . . . . . . 5,110 13.32 26.62 0.00% 39.17% 4.75 Buffalo Wild Wings (BWLD) . . . . . . 2,740 6.11 31.19 21.97% 16.68% 0.00 Sonic (SONC) . . . . . . . . . . . . . . . . . 1,180 15.17 21.65 (3.86)% 53.69% 6.12 Texas Roadhouse (TXRH) . . . . . . . 1,950 3.32 21.11 16.88% 14.07% 0.09 Required

a. Identify a set of three companies from this list to use as comparables for estimating the equity intrinsic value of Panera using the market multiples approach.

b. Assume that you use as comparables the following set of companies: THI, PZZA, and CMG. Estimate Panera’s equity intrinsic value per share using the PB ratio from these peer companies.

c. Use the same comparables as in part b and estimate Panera’s equity intrinsic value per share using the PE ratio from these peer companies.