Dunkin' Brands Group Inc. was upgraded Monday to outperform from sector perform at RBC Capital Markets on the belief the company is taking steps to improve franchisee profitability and customer satisfaction. The price target was raised to $64 from $54. Analysts think the changes will accelerate franchised revenue growth and provide an opportunity for cash back to shareholders. "We believe a dramatic reduction in menu items and heightened focus on core coffee could bolster franchisee profitability by as much as hundreds of basis points over the next year," RBC wrote. Frozen Dunkin' Coffee, which will have a free tasting on May 19, "could be a start to improving core coffee marketing." Dunkin' Brands shares are unchanged in premarket trading, and up 20.1% for the last year. The S&P 500 index is up 15.4% for the last 12 months.
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