TheStreet.com's Jim Cramer says Panera is one company that has plenty of room for expansion.

If the restaurant stocks are stabilizing after a real downturn that has lasted for several weeks, this group -- a leadership group from the fall when gasoline fell in price -- is going to have a wicked move back.

I like Yum! Brands (NYSE: YUM) (Cramer's Take), which never broke down. This is one in which technicians signaled weakness, with Top Gun Rick Bensignor and I going head to head on "Mad Money." He was right that it initially would downtick, but I think it is bottoming along with McDonald's (NYSE: MCD) (Cramer's Take). It's got the growth and it has good tumbling raw costs. The dollar's going the way for both stocks.

Investors are expecting Wall Street to continue its recent winning ways.

Stocks are poised to open higher as investors await March retail sales data and the weekly unemployment report. Markets in Europe and Asia were higher.

Retail sales, though weak, may not be as bad as investors had feared. According to the Wall Street Journal, "Wal-Mart Stores and a select group of its discounting peers have helped retail sales exceed modest expectations every month since December, and that streak likely will continue."

Analyst upgrades:

• Merrill upgraded Schering-Plough (NYSE: SGP) to Buy from Neutral citing the company's better near-term pipeline outlook with two potential blockbusters to be approved over the next year. Schering-Plough's target was raised to $23 from $20.
• Morgan Stanley lifted RadioShack (NYSE: RSH) and Texas Roadhouse (NASDAQ: TXRH) to Equal Weight from Underweight.

Analyst downgrades:

• Jefferies downgraded shares of Hologic (NASDAQ: HOLX) to Hold from Buy as they see limited near-term catalysts after the company reported a Q3 miss and lowered top-line guidance for FY08. The firm lowered their target to $24 from $28.
  
• Baird downgraded California Pizza (NASDAQ: CPKI) to Neutral from Outperform as they see limited near-term upside given the uncertain 2H08/2009 outlook. The company's target was lowered to $15 from $17.
  
• JP Morgan downgraded Jones Lang LaSalle (NYSE: JLL) and CB Richard Ellis (NYSE: CBG) to Neutral from Overweight due to the continued challenging economic environment.

Analyst initiations:

• BC Capital initiated Dollar Financial(NYSE: DLLR) with an Outperform rating and $24 target. The firm likes Dollar's geographically diversified business and valuation.

MOST NOTEWORTHY: California Pizza, Lawson Software and Bare Escentuals were today's noteworthy initiations:

• Oppenheimer initiated California Pizza (NASDAQ:CPKI) with a Perform rating. The firm is neutral on the stock given the company's exposure to California and diminishing returns in new markets.
  
• KeyBanc initiated Lawson Software (NASDAQ:LWSN) with a Hold based on expectations that 1H09 will be challenged by a TTM sales headcount decline and the difficult IT spending environment.
  
• William Blair assumed Bare Escentuals (NASDAQ:BARE) with an Outperform rating. The firm estimates the company owns only a modest single-digit share of the nearly $9B U.S. cosmetics market, making its market opportunity attractive.

OTHER INITIATIONS:

• Citigroup initiated Hess Corp (NYSE:HES) with a Hold rating and $133 target.
  
• NetSuite (NYSE:N) was started with a Sell rating and $14 target at Piper.
  
• Morgan Keegan initiated Berry Petroleum (NYSE:BRY) with an Outperform rating.

MOST NOTEWORTHY: Motorola, California Pizza, and Seagate were today's noteworthy downgrades:

• Banc of America downgraded shares of Motorola (NYSE: MOT) to Neutral from Buy, despite believing the split into two businesses could ultimately unlock value, as they see few catalysts over the next year to lift shares. Banc of America also sees risk to Q1 earnings and lowered their target to $11 from $15.
  
• Friedman Billings lowered California Pizza Kitchen (NASDAQ: CPKI) to Market Perform from Outperform citing sluggish trends in its core markets.
  
• Seagate (NYSE: STX) was cut to Neutral from Outperform at Baird, citing weakening industry conditions throughout the month of March.

OTHER DOWNGRADES:

• Goldman lowered the Communications Tech sector to Neutral from Attractive, and also downgraded Juniper Networks (NASDAQ: JNPR) and Starent Networks (NASDAQ: STAR) to Neutral from Buy, and Aruba Networks (NASDAQ: ARUN) to Sell from Neutral.

The casual dining sector has been hit hard these past few several quarters, not as hard as mortgage lenders and home builders, but hard nonetheless. Consumers are squeezed between rising energy and fuel costs and a drumbeat of negative financial news. Dining out may not be high on many consumers' to-do list.

California Pizza Kitchen Incorporated (NASDAQ: CPKI) is not immune to the impact of these factors. Despite the fact that recently (Aug 9) released 2Q 2007 earnings were overall good, the stock continues to drop from $25 and change in May to $19.28 on 27 August. Analysts had predicted EPS of $0.22 and the stock posted earnings of $0.21, hardly a reason for the stock to fall into disfavor. The numbers tell a much more positive story. Total revenue increased 16% to $158.6 million. Comparable restaurant sales increased 5.4% by total volume, while average weekly sales at the 200+ current restaurants increased almost 5% to $68,535. Some of this increase was due to menu price increases to keep pace with raw material price increases, but some was due to an increase in the number of customers.

There is no denying that margins are tight in the casual dining sector. But California Pizza Kitchen does expect to post modest EPS of $0.03-0.04 in 3Q 2007. Given that small amount, it is difficult to believe FY guidance of $0.58-$0.62 diluted EPS. Management must be planning on a dynamite 4Q 2007.

The company remains optimistic. It opened four new locations with affiliates in 2Q, including a location in Hong Kong, and plans to add six more locations in 3Q. In June, the company granted a third-for-two stock split and is in the midst of a $50 million stock buyback program. The company plans to expand its line of California Pizza Kitchen frozen pizzas to capture a larger slice of the at-home pizza consumer.

California Pizza Kitchen (NASDAQ: CPKI) on May 10 served up hot 1Q earnings with total revenue up 15.2% to just under $150 million. Comparable sales at restaurants open at least a year were up 4.7%, not great but not bad. Net income was $3.6 million or diluted EPS $0.18, including $.02 per share for accelerated restricted stock vesting. Average weekly sales were up 4% to $65,904. The average check was $13.23. All these increases, though modest, are tending in the right direction.

California Pizza Kitchen currently has 212 full-service restaurants, recently opening 2 in Austin, Texas, and 2 in San Francisco, as well as a franchise location in Japan. The company plans to open 4 more new locations in the second quarter. 181 locations are company owned and, the remainder are franchised. With the new openings, the company also expects to bring in a comparable sales increase of 5-6%, CEOs Rick Rosenfield and Larry Flax forecast 2Q diluted EPS of $.34-.36. California Pizza Kitchen is also looking to expand its brand alliance with Kraft Foods.

The company is so confident in its continuing profitability that is recently granted a 3-for-2 stock split, the company's first stock split since the company's founding in 1985. After the split, the company will have just over 29 million shares outstanding, an increase of 10 million from the current 19.4 million shares. It is shaping up to be a good summer for California Pizza Kitchen as the stock has already gained 9% since January 2007. The stock closed at $36.26 on May 29th, down $0.15.

I have written up eight companies that have a chance to be among the top 25 stocks for the NEXT 25 years and I thought it might be time for some discussion. You, the readers have sent in quite a bit of responses to the first six names. Most of your responses have been very positive and I certainly appreciate it. But many of you have been raising questions that I believe need a general response.

Let's put a few ideas and myths to rest once and for all.

The top 25 for the NEXT 25 years are bound to be smaller capitalization companies. By definition, they have to be. I recommend a number of companies on my website that are of a larger capitalization, but to make the list, the law of large numbers is against the larger cap names. If a $20 billion market cap names five folds over the next 10 years, that's a great return and no one should be unhappy. But if a $500 million market cap name goes to $20 billion in value, that's a 40 times return. So, the names will be of a smaller cap nature.

With high-growth companies early in their development, don't get hung up on lack of dividends. High growth companies do not pay dividends, nor should they. You want every penny of after-tax earnings to be plowed back into the business. Mature companies tend to pay cash dividends because their growth rates have slowed, the business lines are well-funded, and the excess cash is returned to shareholders. The downfall is that the stocks will not grow as fast in value as a high-growth company that is executing well. The big joke among portfolio managers when Microsoft Corp. (NASDAQ: MSFT) declared its one time $3 dividend and initiated a quarterly dividend was that the party was over! When is the funeral? Microsoft was signaling that the high-growth, plow the earnings back into the business era was over. The stock traded sideways for nearly three years as Microsoft tried to get its footing back.

The next company on my list of the top 25 stocks for the NEXT 25 years is California Pizza Kitchen (NASDAQ: CPKI). This Los Angeles-based company currently has 210 units open, with the company operating 180 of them -- the remaining 30 are franchised. The concept was founded in 1985, but serious growth began about five years ago.

CPKI has the room to expand the concept by a factor of 15. The United States alone can support upwards of 3,000 stand-alone units. Pizza is one of America's favorite food choices and pizza transcends all demographics and appeals to virtually all ethnic tastes. The hallmark of California Pizza Kitchen is the freshness and the high quality of its pizza products. The company also offers a variety of entree-size salads, pastas and freshly made soups to satisfy almost any taste.

CPKI has initiated a loyalty card for its customer base to accommodate both convenience and repeat business. The company has also published its own cookbook filled with its signature pizza recipes. The average unit volume for CPKI is upwards of $3 million annually and growing. California Pizza Kitchen recently signed a deal with Kraft Foods Inc. (NYSE: KFT) to manufacture and distribute its frozen pizzas to the grocery store sales channel. Not only does this deal help CPKI build its revenue base, but it also helps spread the word about its dedication to a quality product. The Kraft opportunity allows for distribution to all 50 states.

MOST NOTEWORTHY: Today's noteworthy initiations included MasterCard Inc (MA), Time Warner Cable Inc (TWC), ZymoGenetics, Inc (ZGEN) and California Pizza Kitchen, Inc (CPKI):

• AG Edwards started MasterCard Inc (NYSE: MA) with a Hold rating, citing near-term concerns about the consumer and valuation.

• Credit Suisse initiated Time Warner Cable (NYSE: TWC) with a Neutral rating and $41 target.

• Citigroup initiated ZymoGenetics (NASDAQ: ZGEN) Inc with a Sell rating and $12 target. The firm sees further downside given their belief the Street will lower its Thrombin expectations due to sales disappointment in early 2008.

• Morgan Keegan initiated shares of California Pizza Kitchen (NASDAQ: CPKI) with an Outperform rating, finding shares compelling given the company's substantial unit growth opportunity.

OTHER INITIATIONS:

• Buckingham initiated shares of Gentex Corp (NASDAQ: GNTX) with an Underperform with a $14 target, and expects margin pressure to continue.

• Citigroup started POZEN Inc (NASDAQ: POZN) with a Buy rating and $28 target.

• Needham initiated SeaChange International (NASDAQ: SEAC) with a Buy rating and $12 target.

• BB&T started Tarragon Corp (NASDAQ: TARR) with a Buy rating and $13 target, as the firm believes the proposed spin-off of its home-building business would unlock shareholder value.

• Wachovia initiated shares of C.H. Robinson Worldwide Inc (NASDAQ: CHRW) with an Outperform rating.

• Shares of Brookfield Properties Corp (NYSE: BPO) were started with a Hold rating at Stifel.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: MasterCard Inc (MA), Domino's Pizza, Inc (DPZ), STEC, Inc (STEC) were some of today's more notable initiations:

• Suntrust initiated MasterCard Inc (NYSE: MA) with a Buy rating and $130 target, believing the company is the best positioned to benefit from the secular shift from cash to e-payments at the point of sales.

• Domino's Pizza Inc (NYSE: DPZ) was initiated with an Outperform rating and $38 target at Friedman Billings.

• AG Edwards initiated STEC Inc (NASDAQ: STEC) with a Buy rating and $12 target. The firm feels shares are undervalued and that the company's growth profile and profitability should dramatically improve post-consumer business sale and revenue recognition change.

OTHER INITIATIONS:

• California Pizza Kitchen (NASDAQ: CPKI) was initiated with a Market Perform rating and $35 target at Friedman Billings.

• Stanford believes Watts Water Technologies, Inc (NYSE: WTS) is one of the more compelling names in the water infrastructure space and initiated shares with a Buy rating and $42 target.

• Morgan Keegan believes Horizon Lines Inc's (NYSE: HRZ) earnings potential has yet to be realized and initiated shares with an Outperform rating.

• Lazard initiated several solar power companies with Buy ratings: SunPower Corp (NASDAQ: SPWR), First Solar, Inc (NASDAQ: FSLR), Evergreen Solar, Inc (NASDAQ: ESLR) and Energy Conversion Devices, Inc (NASDAQ: ENER).

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).