Market Overview

Will Quick Service Restaurants Success Last?

Share:
Will Quick Service Restaurants Success Last?
Related CMG
3 Catalysts Drive JPMorgan's Downgrade Of Chipotle
Benzinga's Top Upgrades, Downgrades For January 17, 2017
Chipotle Is On The Road To $250 (Seeking Alpha)

In a report published Monday, Morgan Stanley analyst John Glass previewed the Quick Service Restaurant (QSR) industry as many restaurant operators are set to report quarterly results in the coming weeks.

According to Glass, sandwich sales (the segment's largest category) were up an estimated 2.7 percent (excluding McDonald's Corporation (NYSE: MCD)) in the first quarter. The analyst added that this figure isn't quite as strong as the 3.2 percent growth seen in the fourth quarter, it nevertheless continues the momentum seen throughout 2014.

However, Glass noted that QSR valuations are higher than casual dining restaurants with an average P/E of 28.5x. As such, fast food restaurants are trading around 20 percent above three- and five-year historical average. The analyst did note that there are several QSRs that are trading at a lower premium versus the prior three years, including Chipotle Mexican Grill, Inc. (NYSE: CMG), Dunkin Brands Group Inc (NASDAQ: DNKN), Panera Bread Co (NASDAQ: PNRA), Starbucks Corporation (NASDAQ: SBUX) and Yum! Brands, Inc. (NYSE: YUM)

Here is a schedule of several key QSR earnings releases:

  • Yum! Brands will report its first quarter results on April 21.
  • Chipotle Mexican Grill will report its first quarter results on April 21.
  • McDonald's will report its first quarter results on April 22.
  • Dunkin Brands is projected to report its first quarter results on April 23.
  • Starbucks will report its second quarter results on April 23.
  • Panera Bread will report its first quarter results on April 28.

Latest Ratings for CMG

DateFirmActionFromTo
Jan 2017JP MorganDowngradesOverweightNeutral
Jan 2017WedbushUpgradesUnderperformNeutral
Nov 2016GuggenheimDowngradesNeutralSell

View More Analyst Ratings for CMG
View the Latest Analyst Ratings

Posted-In: Casual Dining Fast Food John Glass Morgan StanleyAnalyst Color Restaurants Analyst Ratings General Best of Benzinga

 

Related Articles (CMG + DNKN)

View Comments and Join the Discussion!