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SunTrust Initiates Quick Service, Fast Casual Restaurant Names

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SunTrust Initiates Quick Service, Fast Casual Restaurant Names

SunTrust has initiated coverage on nine restaurant stocks in the quick service and fast casual space. Here’s a summary of what analyst Jake Bartlett had to say.

McDonald’s Corporation (NYSE: MCD)

The firm initiates McDonald’s at Buy with a price target of $117. Bartlett believes that the experience of the new CEO and his track record of organizational turnarounds bode well for his chances of getting same-store sales growth trends back on the right track.

Wendys Co (NASDAQ: WEN)

SunTrust starts Wendys at Buy with an $11 target. Bartlett believes that same-store sales growth is reaching an inflection point and that new unit growth will reaccelerate.

El Pollo LoCo Holdings Inc (NASDAQ: LOCO)

The firm initiates El Pollo Loco at Buy with a $17 target. Bartlett is calling for 7 percent unit growth in 2016, but believes that the market is currently pricing in no growth past 2015.

Related Link: SunTrust Lovin' McDonald's, Says Investors Are Being 'Paid To Wait' For A Turnaround

Chipotle Mexican Grill, Inc. (NYSE: CMG)

SunTrust starts Chipotle at Buy with a $850 target. Bartlett sees marketing, catering, online throughput initiatives and the return of Carnitas as potential sales drivers in 2016.

Buffalo Wild Wings (NASDAQ: BWLD)

The firm starts Buffalo Wild Wings at Buy with a $32 target. Bartlett identifies no major national competition for the company and sees “a clear runway to 2,500 units in the U.S.”

Cracker Barrel Old Country Store, Inc (NASDAQ: CBRL)

SunTrust initiates Cracker Barrel at Neutral with a $164 target. Bartlett believes much of the opportunity the company has to create shareholder value by optimizing its balance sheet or real estate ownership is already prices into the stock.

Darden Restaurants Inc (NYSE: DRI)

The firm initiates Darden at Neutral with a $71 target. Bartlett believes that Olive Garden will regain same-store sales momentum, but currently sees a “balanced risk/reward” for the stock.

Noodles & Co (NASDAQ: NDLS)

SunTrust starts Noodles at Neutral with a target of $15. Bartlett’s bull case target for the stock is $27, but he sees “elevated risks” until the company demonstrates it can regain positive SSS momentum.

Popeyes Louisiana Kitchen Inc (NASDAQ: PLKI)

The firm starts Popeyes at Neutral with a $62 target. Bartlett identifies several positives, including same-store sales outperformance, strong unit growth and the possibility of share repurchases. However, he feels that these positives are already priced into the stock at current levels.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for MCD

DateFirmActionFromTo
Nov 2019UpgradesNeutralBuy
Nov 2019MaintainsBuy
Nov 2019MaintainsNeutral

View More Analyst Ratings for MCD
View the Latest Analyst Ratings

Posted-In: Jake BartlettAnalyst Color Price Target Initiation Restaurants Top Stories Analyst Ratings General Best of Benzinga

 

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