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Buy Panera on tech-driven profit growth: Canaccord

A Panera Bread sandwich and chips
Daniel Acker | Bloomberg | Getty Images

Investors should buy Panera Bread shares on the prospect of solid profit growth ahead due to recent store upgrades, according to Canaccord Genuity, which initiated coverage on the restaurant chain with a buy rating.

"[Panera is] near the end of an investment cycle that depressed earnings but positioned the brand for outperformance versus its peers in the coming years," analyst Lynne Collier wrote in a note to clients Monday.

"We believe that menu innovation will be a long-term driver as the company has moved to 'clean' food and we expect continued upgrades and menu creativity in the coming quarters."