4 Restaurant Stocks This RayJ Analyst Is Backing Off From

• Restaurant stocks have been volatile over the past three months.
• Raymond James’ Brian M. Vaccaro downgraded the ratings on Buffalo Wild Wings BWLD, DineEquity Inc DIN, Darden Restaurants, Inc. DRI and Ruth's Hospitality Group, Inc. RUTH.
• Although industry comps are marginally positive, Vaccaro said that the recent weakening of various macro indicators point towards an upcoming deceleration in the momentum.

Analyst Brian Vaccaro said, “Though industry comps remain in slightly positive territory [benefit of lower gas prices (supported by a recent study of credit card data) offsetting lackluster wage growth], momentum could slow in coming quarters given recent softening in various U.S. macro indicators (jobs data, PMIs, regional Fed surveys, etc.) and as we begin to lap the y/y benefit of lower gas prices.”

Taking into account the potential deceleration as well as increased market volatility, Vaccaro downgraded the ratings on Buffalo Wild Wings, Darden Restaurants and Ruth's Hospitality from Outperform to Market Perform.

He also downgraded DineEquity from Strong Buy to Outperform, saying that while industry and market uncertainty could restrict multiple expansion, the stock appeared “undervalued.” The price target has been reduced from $120 to $110.