Wingstop Among Restaurant Stocks That Could Fly High, While Others Are Grounded
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 (NASDAQ: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 (NASDAQ:BJRI)
- Brinker International, Inc. (NYSE:EAT)
- Denny's Corp (NASDAQ:DENN)
- Ruth's Hospitality Group, Inc. (NASDAQ:RUTH)
- Kura Sushi USA Inc (NASDAQ:KRUS)
- Darden Restaurants, Inc. (NYSE:DRI)
Full-service stocks that seem to be too expensive
- Cheesecake Factory Inc (NASDAQ:CAKE)
- Texas Roadhouse Inc (NASDAQ:TXRH)
- Chuy's Holdings Inc (NASDAQ:CHUY)
Drive-thru stocks with potential
Delivery/takeout stocks with potential
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.