Investors must be wondering, too. The share price, which had risen 42% since the IPO, started the day by falling almost 5% on the "sell" rating.
Three of Dunkin's other underwriters haven't helped much, either. Barclays
But valuation ...
Goldman said it liked Dunkin's global potential, as did Barclays. But both said, in essence, that the stock is overpriced compared to its competitors such as McDonald's
... is in the eye of the beholder
But wait -- other Dunkin' underwriters have taken a totally different view of the company. JPMorgan Chase, the top underwriter of Dunkin's IPO, even gave it an "overweight" rating, saying "low-risk growth should sustain [its] premium multiple."
Dunkin's ambitious plan had been to increase the number of its stores to 15,000 over the next 20 years. However, Goldman estimates that the company would only be able to sustain another 3,200 stores, for a total of 10,000. By way of comparison, McDonald's has 14,000 domestic stores, and Starbucks has 10,900.
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