After digesting the earnings reports served up over the past couple of weeks, my stomach hurts. That’s because there have been so many high-profile misses, on the bottom line and especially on the top line, that it’s enough to make any bull nauseous. Moreover, many of the biggest industrial bellwethers have also issued pessimistic guidance going forward.#-ad_banner-#

Last week, we had generally downbeat earnings news from Caterpillar (NYSE: CAT), General Electric (NYSE: GE) and McDonald’s (NYSE: MCD), to name just a few of the biggest disappoinments. This week, we’ve already seen disappointing data from 3M (NYSE: MMM), DuPont (NYSE: DD), United Technologies (NYSE: UTX) and Western Digital (NYSE: WDC) — and it’s only Wednesday.

Of course, earnings season hasn’t been completely unpalatable. In fact, there’s been a few pleasant surprises, including embattled Facebook Inc. (Nasdaq: FB), which came in with strong profits that sent the battered social networking firm’s shares soaring.

Now, some intrepid traders I know are in buy mode with respect to Facebook, but for my money, I like to buy a stock where I can actually taste the profits, and this week that means shares of Panera Bread (Nasdaq: PNRA), which are up 24% year to date.

After Tuesday, Oct. 23’s closing bell, the restaurant chain bucked the recent downbeat trend in the sector set by Mickey D’s and Chipotle Mexican Grill (NYSE: CMG) by actually smashing through analysts expectations for both earnings per share and same-store sales growth.

Panera reported that third-quarter net income rose 27% to $36.5 million, which comes to $1.24 per share. That’s well above consensus estimates for EPS of $1.19. The company’s top line impressed as well, surging some 17% in third-quarter to $529.4 million. The all-important same-store sales figure, a key in the industry, for both company-owned restaurants and franchised Panera outlets, saw a 5.8% surge in the quarter, which is better than the already hefty 5.1% increase Wall Street was hoping to see.

The more important statistic, however, was Panera’s upbeat outlook.

The company lifted its fourth-quarter earnings target to $1.72 to $1.74 per share from its prior range of $1.66 to $1.70. That means that even if the numbers come in on the low end, they will easily beat previous high estimates for EPS of $1.70. Moreover, Panera said that its 2013 earnings per share (EPS) will now be $6.85 to $7, up from estimates for $6.91 per share.

Now, it should come as no surprise that Panera shares surged on the upbeat earnings news. The stock was up about 6% in after-hours trading immediately after the earnings release, and the gains continued in Wednesday, Oct. 24’s trade.

The chart below shows the shares midway through Wednesday, Oct. 24’s session:

Here we can see the bullish trend in Panera, particularly since late July. That’s when the stock began a move up that has so far resulted in a 17% gain since the shares breached the 50-day and 200-day moving averages.

I suspect that during the current bout of earnings disappointments, traders are going to try to buy the cream of the crop in terms of companies with fundamental momentum and trading momentum. That describes Panera to a T, and as such, I think this stock makes a tasty trade going forward.

Action to Take –> Buy Panera at the market price. Set stop-loss at $156.45. Set initial price target at $195.50 for a potential 15% gain in three months.

This article originally appeared on TradingAuthority.com:
A Rare Earnings Winner Could Net You 15%