FROM THE ASSOCIATED PRESS

A Jefferies analyst started coverage of Panera Bread Co. with a “Buy” rating today, saying that unlike some of its rivals, the Richmond Heights-based casual dining chain will increase sales at its older stores and could top Wall Street’s expectations.

Jeff Farmer said Panera, which operates locally as St. Louis Bread Co., has been hurt by higher wheat prices and the failure of its pizza products and other items. But he thinks same-store sales will grow and the company’s new breakfast sandwiches will be a success. He added the company will save money in 2009 as it begins to pay less for wheat.

He set a price target of $56 per share, implying the stock will rise 16.6 percent from Wednesday’s closing price of $48.02.

Farmer said he expects further profit margin weakness and soft same-store sales for Cheesecake Factory Inc. and PF Chang’s China Bistro Inc. He assigned “Hold” ratings to both stocks.

Same-store sales is considered a key measurement of retailer health because it evaluates results at older stores rather than newly opened ones.

Farmer said same-store sales at Cheesecake Factory and PF Chang’s have been weaker than those of rivals for the last several years. He thinks margins and same-store sales will stop decreasing in 2009, but he does not expect much growth for either company.

He set a price target of $23 per share on Cheesecake Factory stock, which finished at $20.62 Wednesday, and a target of $31 per share on PF Chang’s stock, which closed at $27.20

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Jeffries analyst sees Panera as a ?Buy?