While investors may be wondering if the rally in full-service restaurant stocks is over and if it is time to invest in quick-service restaurant stocks, this is not an “either/or decision,” according to Stephens & Co.
The Wingstop Analyst: James Rutherford maintained an Overweight rating for Wingstop Inc WING, with the price target unchanged at $172.
The Wingstop Thesis: Poor weather conditions in February were favorable for delivery and drive-thru restaurant stocks, Rutherford said in the note.
This was reflected in Wingstop’s first-quarter comps, which handsomely surpassed expectations, he added.
Investors seem to be underestimating the positive impact of the reopening on drive-thru stocks, the analyst noted.
The Stephens & Co. analyst placed the following are full-service, drive-thru, delivery and takeout restaurants in these categories:
Full-service stocks with significant multiple expansion potential:
- BJ's Restaurants, Inc BJRI
- Brinker International, Inc. EAT
- Denny's Corp DENN
- Ruth's Hospitality Group, Inc. RUTH
- Kura Sushi USA Inc KRUS
- Darden Restaurants, Inc. DRI
Full-service stocks that seem to be too expensive
- Cheesecake Factory Inc CAKE
- Texas Roadhouse Inc TXRH
- Chuy's Holdings Inc CHUY
Drive-thru stocks with potential
- McDonald’s Corp MCD
- Wendy’s Co WEN
Delivery/takeout stocks with potential
- Papa John's Int'l, Inc. PZZA
- Wingstop Inc WING
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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