Domino's Pizza Group Stock (OTC:DPUKY), Trade Ideas

Domino's Pizza Group

Domino's Pizza Group PLC is the UK's pizza brand and a player in the Irish market. The company owns, operates and franchises Domino's stores in the UK and the Republic of Ireland. The company also has an associate investment in Germany and Luxembourg. The company is organised into two geographical business units based on the operating models of the regions, the UK and Ireland. Revenue included in each segment includes all sales made to franchise stores (royalties, sales to franchisees and rental income) and by corporate stores located in that segment.

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DOMINOS PIZZA U&I UNS/ADR by Dominos Pizza UK and IRL Plc.

Domino's Pizza Group PLC

Starbucks (SBUX) has been in a tough spot over the past few weeks amid boycotts over the Israel-Hamas war and foot traffic declines. So, could the world's largest coffee company stock still be a worthy year-end buy? Read on... Starbucks Corporation (<a href="https://stocknews.com/stock/SBUX/">SBUX</a>), amongst other establishments, has been feeling the heat as consumers demand organizations to express a stance in relation to the Israel-Hamas conflict. Boycott campaigns have particularly escalated in several Arab nations.
The coffee chain's position became a headline when the Union briefly broadcasted a statement concerning its view on the Israel-Hamas conflict. However, Starbucks CEO Laxman Narasimhan said that people protesting against the company have been "<a href="https://finance.yahoo.com/news/starbucks-says-protestors-against-coffee-234218558.html">influenced by misrepresentation on social media</a>" of what it stands for.
On the other hand, the company seems to be witnessing a decreasing customer traffic. According to data from Placer.ai., customer traffic was weaker in November, while visits during the first week following the release of the Holiday Menu were <a href="https://www.thestreet.com/restaurants/starbucks-has-a-problem-thats-bigger-than-mcdonalds?puc=yahoo&amp;cm_ven=YAHOO">down 3.4% year-over-year</a>, indicating lower demand for the special holiday beverages.
Furthermore, John Ivankoe, an analyst at J.P. Morgan, has recently <a href="https://finance.yahoo.com/news/not-happy-holiday-starbucks-facing-181003691.html">reduced his U.S. sales predictions</a> for Starbucks' fiscal first quarter, citing an apparent slowdown over the holiday period compared to Fall promotions.
As a result, Starbucks shares have depressingly dipped 7.4% in the past month, and this downward trend may continue considering the ongoing legal tussle with the Union. Consequently, potential investors are advised to monitor the situation and hold off on investments until demonstrable improvements manifest. Let's discuss some of its key financial metrices to gauge its prospects.
Analyzing Starbucks Corporation's Financial Performance from 2020 to 2023
The trailing-12-month Net Income of SBUX has undertaken notable fluctuations as observed from the data provided. The significant highlights are as follows:
<ul>
<li>The earliest data, dating back to December 27, 2020, shows a net income of $664.8 million.</li>
<li>Over the year 2021, there was a substantial increase in the Net Income, which rose from $995.8 million on March 28, 2021, skyrocketed to $2.83 billion on June 27, 2021, and then again to $4.20 billion by October 3, 2021.</li>
<li>The Net Income demonstrated an upsurge in the first quarter of 2022, reaching approximately $4.41 billion on April 3, 2022.</li>
<li>However, the third quarter of 2022, saw a mild decrease, with net income falling to $4.17 billion on July 3, 2022, before plummeting to $3.28 billion on October 2, 2022.</li>
<li>The year 2023 witnessed a relatively steady recovery after the drop in the previous year. The Net Income increased from $3.32 billion on January 1, 2023, to $3.78 billion on July 2, 2023, and touching $4.12 billion on October 1, 2023.</li>
</ul>
In terms of growth rate, there has been a substantial escalation from the initial value of $664.8 million on December 27, 2020, to the last recorded value of $4.12 billion on October 1, 2023, showing a noticeable progression in Starbucks Corporation's Net Income over the time duration. It is crucial to note that these trends and fluctuations might be influenced by various factors - seasonal changes, major business decisions, market trends, etc.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699416.47042.png" />
The Starbucks Corporation (SBUX)'s trailing-12-month Revenue has generally been on an upward trend from December 2020 to October 2023, with some fluctuations. The data shows steady growth. Here are the highlights of the Starbucks Corporation's revenue growth:
<ul>
<li>In December 2020, the Revenue was at $23.17 billion.</li>
<li>There was a steady rise in Revenue over the following quarters, reaching $29.06 billion in October 2021 and $32.25 billion in October 2022.</li>
<li>The most rapid growth appears to have occurred between June and September 2021, where the Revenue jumped from $27.12 billion to $29.06 billion, signifying a remarkable surge within this period.</li>
<li>However, the period between July and October 2022 saw a somewhat slowed growth, where the Revenue only increased from $31.93 billion to $32.25 billion.</li>
<li>Towards the end of the series, from January 2023 to October 2023, the Revenue demonstrated robust growth, from $32.91 billion to $35.98 billion, indicating a strong financial period for the corporation.</li>
</ul>
The last reported value in the series is $35.98 billion as of October 2023. Comparatively, from the initial reported revenue of $23.17 billion in December 2020, this signifies a growth rate of approximately 55% over almost three years.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699450.88922.png" />
The series of data represents the evolution of the <a href="https://www.investopedia.com/terms/c/currentratio.asp">Current Ratio</a> for Starbucks Corporation (SBUX) from December 2020 up until October 2023.
<ul>
<li>Starting with a value of 1.06 on December 27, 2020, the Current Ratio experienced a slight increase, reaching 1.07 by March 28, 2021.</li>
<li>Subsequently, it saw a marginal dip to 1.02 by June 27, 2021.</li>
<li>A peak followed this decrease; by October 3, 2021, the ratio climbed to 1.2.</li>
<li>However, from January 2, 2022, a marked downturn ensued as the Current Ratio declined steadily from 0.813, going as low as 0.767 in October that year.</li>
<li>This trend broadly continued until the beginning of 2023, hitting a low of 0.75 on January 1.</li>
<li>From April 2, 2023, SBUX's Current Ratio started to gradually recover, closing at a value of 0.782 on October 1, 2023.</li>
</ul>
Between the start date in December 2020 and the end date in October 2023, the Current Ratio decreased by approximately 26%, indicating a declining tendency for Starbucks Corporation's ability to cover its short-term liabilities with its short-term assets over this period. The emphasis on more recent data shows a slight surge in the Current Ratio after hitting the lowest point in January 2023, though the overall performance remains below the starting measure.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699555.7487.png" />
The following summary details the trend and fluctuations of the Analyst Price Target for SBUX from 2021 to 2023. Main Points:
<ul>
<li>The data series begins with an Analyst Price Target of $124 in November 2021, experiencing marginal escalation to $124.28 by December 2021 before falling to $122.8 in January 2022.</li>
<li>The price target witnessed a continued downward trend until June 2022 when it reached its lowest point at $94.68.</li>
<li>The figure experienced minor fluctuations over the following months but remained generally around the mid-$90s until December 2022.</li>
<li>In early 2023, there was a pronounced increase, bringing the Analyst Price Target back above the $100-mark. This resurgence continued until February 2023, where it peaked at $108.55.</li>
<li>For the rest of 2023, the Analyst Price Target fluctuated slightly but essentially remained consistent around the low $110s.</li>
<li>By the end of the series in December 2023, the Analyst Price Target was marginally below its peak for the year at $110.</li>
</ul>
Growth Rate: Between November 2021 and December 2023, the Analyst Price Target for SBUX decreased by roughly -11.3%, dropping from $124 to $110. With greater emphasis on the more recent data, it can be inferred that while Starbucks witnessed a sharp decline in its Analyst Price Target in the first half of 2022, recovery took place in 2023. Although the price target did not reach its initial levels, it largely maintained a steady rate around the $110 mark throughout the latter half of 2023.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699649.88725.png" />
Analyzing Volatility and Declining Trends in Starbucks Corporation's Share Prices
Here's a description of the trend and growth rate of Starbucks Corporation (SBUX) share prices based on the provided data:
<ul>
<li>At the beginning, Starbucks' share price was $99.03 in June 2023.</li>
<li>The share price saw a slight decrease to $97.525 in the first week of July 2023 but rebounded quickly to reach a peak of $102.082 at the end of July 2023.</li>
<li>In August 2023, the share price began to fluctuate, initially decreasing to $95.626 by August 25 but experiencing a brief recovery to $100.97 earlier in the month.</li>
<li>From the end of August 2023 through September, there was a clear downward trend with the price falling to as low as $91.644 by the end of September 2023.</li>
<li>The share price remained relatively stable around the low $90s in early to mid-October 2023.</li>
<li>In November 2023, the share price saw significant growth, peaking at $105.668 by mid-November. This represents the highest value recorded in this dataset.</li>
<li>However, the share price witnessed a decline again closing the year 2023 at $95.38 on December 26.</li>
</ul>
Clearly, there is a significant amount of fluctuation in the share price of Starbucks Corporation (SBUX) during this period indicating volatility in its market value. Although the share price reached a high point in November, it has generally shown a decelerating trend from mid-July through the end of the given data range in December 2023. Here is a chart of SBUX's price over the past 180 days.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699728.96961.png" />
Analyzing Starbucks' Performance: Momentum, Quality, and Stability Ratings Overview
SBUX has an overall C rating, translating to a Neutral in our <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> system. It is ranked #16 out of the 44 stocks in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> category.
The POWR Ratings for SBUX offers insights into the company's performance along various dimensions. The three most noteworthy dimensions over the given period include Momentum, Quality, and Stability.
<ul>
<li>Momentum: This dimension saw the highest rating for SBUX at 90 in June 2023. However, a clear downward trend can be observed in this rating, with the ratings dropping gradually to 67 by December 27, 2023.</li>
<li>Quality: For the Quality dimension, SBUX started with an impressive rating of 90 in June 2023, maintaining it until September 30, 2023. Though there was a slight decline in the subsequent months, it still posted a strong score of 88 on December 27, 2023.</li>
<li>Stability: The Stability ratings for SBUX have followed a slightly volatile but overall upward trend. Starting from a rating of 71 in June 2023, the stability rating increased to reach its peak at 80 by October 31, 2023. It subsequently moderated to 76 on December 27, 2023.</li>
</ul>
These trends suggest that while SBUX showed signs of decelerating momentum, it continued to showcase high quality and stability throughout the specified period.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1703699805.93386.png" />
How does Starbucks Corporation (SBUX) Stack Up Against its Peers?
Other stocks in the Restaurants sector that may be worth considering are Rave Restaurant Group Inc. (<a href="https://stocknews.com/stock/RAVE">RAVE</a>), Nathan's Famous Inc. (<a href="https://stocknews.com/stock/NATH">NATH</a>), and Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY">DPUKY</a>) -- they have better POWR Ratings.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today's volatile markets:
<a href="https://report.stocknews.com/free-report/3stocks/?formplacement=artbotad_3s">3 Stocks to DOUBLE This Year &gt;</a>

<hr />
SBUX shares were trading at $95.09 per share on Wednesday afternoon, down $0.58 (-0.61%). Year-to-date, SBUX has declined -2.13%, versus a 26.46% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Subhasree Kar</h2> <img src='https:/wp-content/uploads/2021/06/Subhasree-Kar-HS2.jpg' style="float:left; padding:5px;width:125px;">Subhasree's keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master's degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.<a href="https://stocknews.com/authors/?author=subhasree-kar">More...</a>The post <a href=https://stocknews.com/news/sbux-rave-nath-dpuky-analyzing-the-year-end-performance-of-starbucks-sbux/>Analyzing the Year-End Performance of Starbucks (SBUX)</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

Analyzing the Year-End Performance of Starbucks (SBUX)

The restaurant industry finds itself well-positioned for growth fueled by trends such as digitization, easing inflation, changing consumer preferences, popularity of online delivery services, and rising inclination toward experience-based dining. Therefore, it could be wise to buy fundamentally strong restaurant stocks Carrols Restaurant (TAST), Domino's Pizza (DPUKY), and Luckin Coffee (LKNCY). Keep reading… The restaurant industry is benefitting from easing inflation and the rise in consumer spending. It is poised for further expansion due to heightened consumer enthusiasm for dining experiences, evolving consumer preferences, and innovative dining concepts.
Considering these factors, it could be wise to buy fundamentally strong restaurant stocks Carrols Restaurant Group, Inc. (<a href="https://stocknews.com/stock/TAST/">TAST</a>), Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>), and Luckin Coffee Inc. ADR (<a href="https://stocknews.com/stock/LKNCY/">LKNCY</a>).
Before diving deeper into their fundamentals, let's discuss what's shaping the restaurant industry's prospects.
In November, the restaurant industry achieved its strongest same-store traffic performance in nearly two years, showing a year-to-year growth acceleration of <a href="https://www.producebluebook.com/2024/01/03/restaurants-post-sales-and-traffic-growth-in-november/">0.7 percentage</a> points. Same-store sales growth was 1.9% in November, a 0.5 percentage-point sequential improvement. Moreover, consumer spending increased by <a href="https://www.bea.gov/news/blog/2023-12-22/personal-income-and-outlays-november-2023">$46.7 billion (0.2%) in November</a>.
According to the NRA, restaurant sales have been steadily rising, reaching <a href="https://restaurant.org/research-and-media/research/economists-notebook/economic-indicators/total-restaurant-industry-sales/">$94.7 billion in November</a>, marking the ninth consecutive month of growth. Over the last nine months, eating and drinking place sales increased by 8.5%, outpacing the 1.7% gain in non-restaurant retail sectors during the same period, highlighting consumers' sustained prioritization of dining out and spending on experiences.
The restaurant industry is expected to see robust growth in the near term due to the rising popularity of dining out, takeout, and delivery. The surge in demand for online food delivery services since the pandemic underscores the importance of adapting to evolving consumer preferences for sustained success.
The global quick-service restaurant market is projected to <a href="https://www.fortunebusinessinsights.com/quick-service-restaurants-market-103236">reach $1.78 trillion by 2030</a>, growing at a CAGR of 11.2%. The global food service market is expected to grow at a <a href="https://www.fortunebusinessinsights.com/food-service-market-106277">CAGR of 10.8%</a> and reach $5.42 trillion by 2030.
Considering these conducive trends, let's analyze the fundamental aspects of the three <a href="https://stocknews.com/category/restaurants/">Restaurants</a> picks, beginning with the third choice.
Stock #3: Carrols Restaurant Group, Inc. (<a href="https://stocknews.com/stock/TAST/">TAST</a>)
TAST and its subsidiaries operate as a restaurant company in the United States. The company operates as a Burger King and Popeyes franchisee.
In terms of the trailing-12-month <a href="https://www.investopedia.com/terms/a/assetturnover.asp">asset turnover ratio</a>, TAST's 1.14x is 14.4% higher than the 1x industry average.
TAST's restaurant sales for the third quarter that ended October 1, 2023, increased 7.2% year-over-year to $475.76 million. The company's adjusted net income stood at $9.99 million and $0.16 per share, compared to an adjusted net loss of $7.29 million and $0.14 per share in the year-ago quarter. Also, its adjusted EBITDA rose 136.9% over the prior-year quarter to $41.87 million.
For the quarter ended December 31, 2023, TAST's revenue is expected to increase 4.6% year-over-year to $465.52 million. Its EPS for the fiscal 2024 is expected to increase 2.6% year-over-year to $0.49. It surpassed the consensus EPS estimates in each of the four trailing quarters. Over the past nine months, the stock has gained 211.7% to close the last trading session at $7.98.
TAST's positive outlook is reflected in its <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a>. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Growth and Sentiment and a B for Value. It is ranked #4 out of 44 stocks in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry. To see TAST's Momentum, Stability, and Quality ratings, <a href="https://stocknews.com/stock/TAST/">click here</a>.
Stock #2: Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>)
Based in Milton Keynes, United Kingdom, DPUKY owns, operates, and franchises Domino's Pizza stores. It operates stores in the United Kingdom and the Republic of Ireland and also leases its stores internationally.
In terms of the trailing-12-month net income margin, DPUKY's 18.28% is 304.3% higher than the 4.52% industry average. Likewise, its 16.34% trailing-12-month EBIT margin is 115.6% higher than the 7.58% industry average. Additionally, its 11.13% trailing-12-month levered FCF margin is 108.3% higher than the 5.34% industry average.
DPUKY's system sales for the half year that ended June 25, 2023, increased 7.9% year-over-year to £766.4 million ($971.98 million). Its group revenue rose 19.6% over the prior-year quarter to £332.9 million ($422.20 million). The company's underlying EBITDA for the period increased 8.2% year-over-year to £68.7 million ($87.13 million). Also, the company's statutory EPS came in at 19.3p, representing an increase of 3.1% year-over-year.
Analysts expect DPUKY's revenue for the fiscal year ended December 31, 2023, to increase 16.4% year-over-year to $832.80 million. Over the past year, the stock has gained 37.7% to close the last trading session at $9.65.
DPUKY's POWR Ratings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It is ranked #3 in the same industry. It has an A grade for Stability. To see DPUKY's Growth, Value, Momentum, Sentiment, and Quality ratings, <a href="https://stocknews.com/stock/DPUKY/">click here</a>.
Stock #1: Luckin Coffee Inc. ADR (<a href="https://stocknews.com/stock/LKNCY/">LKNCY</a>)
Headquartered in Xiamen, the People's Republic of China, LKNCY offers retail services of freshly brewed drinks and pre-made food and beverage items in the People's Republic of China. It provides hot and iced freshly brewed coffee and specialty coffee based on market and seasonal trends.
In terms of the trailing-12-month Return on Total Capital, LKNCY's 18.55% is 206.4% higher than the 6.05% industry average. Likewise, its 15.18% trailing-12-month Return on Total Assets is 279.8% higher than the 4% industry average. Additionally, its 1.58x trailing-12-month asset turnover ratio is 58.2% higher than the 1x industry average.
For the third quarter that ended September 30, 2023, LKNCY's total net revenues increased 84.9% from the previous year's quarter to RMB7.20 billion ($1.01 billion). Its non-GAAP operating income rose 47.8% year-over-year to RMB1.03 billion ($144.61 million).
In addition, the company's net income and net income per ADS came in at RMB1.14 billion ($160.05 million) and RMB3.60, up 122.2% and 125% year-over-year, respectively.
Street expects LKNCY's EPS and revenue for fiscal 2024 to increase 32.2% and 43.7% year-over-year to $2.29 and $5.02 billion, respectively. Over the past year, the stock has gained 11.9% to close the last trading session at $26.15.
LKNCY's strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It is ranked #2 in the Restaurants industry. It has a B grade for Growth, Sentiment, and Quality. <a href="https://stocknews.com/stock/LKNCY/">Click here</a> to see LKNCY's Value, Momentum, and Stability ratings.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today's volatile markets:
<a href="https://report.stocknews.com/free-report/3stocks/?formplacement=artbotad_3s">3 Stocks to DOUBLE This Year &gt;</a>

<hr />
LKNCY shares were trading at $26.10 per share on Friday morning, down $0.05 (-0.19%). Year-to-date, LKNCY has declined -4.33%, versus a -1.35% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Abhishek Bhuyan</h2> <img src='https:/wp-content/uploads/2023/07/ABhuyan.jpg' style="float:left; padding:5px;width:125px;">Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.<a href="https://stocknews.com/authors/?author=abhishek-bhuyan">More...</a>The post <a href=https://stocknews.com/news/lkncy-dpuky-tast-3-gaining-restaurant-stocks-to-buy-january-2024/>3 Gaining Restaurant Stocks to Buy January 2024</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

3 Gaining Restaurant Stocks to Buy January 2024

Leading coffeehouse chain Starbucks (SBUX) has seen declining investor confidence amid boycotts and labor disputes. However, with Street analysts providing robust estimates for the fiscal first quarter, is the stock a buy now? Keep reading... Starbucks Corporation (<a href="https://stocknews.com/stock/SBUX/">SBUX</a>) reportedly exceeded analysts' expectations for its fiscal fourth quarter, riding the wave of strong U.S. demand for its premium beverages.
However, noticeable decreases in the company's market value in recent months imply a potential slowdown in sales due to tightened consumer spending, increasing labor unrest, and boycotts fueled by the Israel-Gaza conflict.
In light of these factors, J.P. Morgan analyst John Ivankoe <a href="https://finance.yahoo.com/news/not-happy-holiday-starbucks-facing-181003691.html">has trimmed his sales estimates</a> for the company for the fiscal first quarter, pointing towards an evident slowdown during the holiday season as opposed to the Fall promotions.
Looking forward to fiscal 2024, Starbucks has lowered its forecast for same-store sales growth from a long-term projection of 7-9% to the range of 5-7%. On the other hand, the company's predicted revenue growth of 10-12% aligns with its previous guidance. However, CFO Rachel Ruggeri suggests net sales are likely to land on the lower end of the given range. Starbucks forecast an earnings per share growth of 15-20%.
Street analysts predict Starbucks' revenue and EPS will surge by 10.5% and 25.1%, respectively, reaching $9.63 billion and $0.94 fiscal quarter ended December 2023.
Despite bullish expectations, there may be continuous downward pressure on SBUX due to the boycotts, labor disputes, and geopolitical tensions. Thus, potential investors may find it prudent to await an opportune entry point into purchasing Starbucks stock. A comprehensive examination of Starbucks' fundamental performance indicators could provide valuable insights moving forward.
Starbucks Corporation's Financial Performance and Analyst Predictions from March 2021 to October 2023
The trailing-12-month Net Income of SBUX has undertaken notable fluctuations as observed from the data provided. The significant highlights are as follows:
<ul>
<li>The earliest data, dating back to December 27, 2020, shows a net income of $664.8 million.</li>
<li>Over the year 2021, there was a substantial increase in the Net Income, which rose from $995.8 million on March 28, 2021, skyrocketed to $2.83 billion on June 27, 2021, and then again to $4.20 billion by October 3, 2021.</li>
<li>The Net Income demonstrated an upsurge in the first quarter of 2022, reaching approximately $4.41 billion on April 3, 2022.</li>
<li>However, the third quarter of 2022, saw a mild decrease, with net income falling to $4.17 billion on July 3, 2022, before plummeting to $3.28 billion on October 2, 2022.</li>
<li>The year 2023 witnessed a relatively steady recovery after the drop in the previous year. The Net Income increased from $3.32 billion on January 1, 2023, to $3.78 billion on July 2, 2023, and touching $4.12 billion on October 1, 2023.</li>
</ul>
In terms of growth rate, there has been a substantial escalation from the initial value of $664.8 million on December 27, 2020, to the last recorded value of $4.12 billion on October 1, 2023, showing a noticeable progression in Starbucks Corporation's Net Income over the time duration. It is crucial to note that these trends and fluctuations might be influenced by various factors – seasonal changes, major business decisions, market trends, etc.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706541921.14977.png" />
The Starbucks Corporation (SBUX)'s trailing-12-month Revenue has generally been on an upward trend from December 2020 to October 2023, with some fluctuations. The data shows steady growth. Here are the highlights of the Starbucks Corporation's revenue growth:
<ul>
<li>In December 2020, the Revenue was at $23.17 billion.</li>
<li>There was a steady rise in Revenue over the following quarters, reaching $29.06 billion in October 2021 and $32.25 billion in October 2022.</li>
<li>The most rapid growth appears to have occurred between June and September 2021, where the Revenue jumped from $27.12 billion to $29.06 billion, signifying a remarkable surge within this period.</li>
<li>However, the period between July and October 2022 saw a somewhat slowed growth, where the Revenue only increased from $31.93 billion to $32.25 billion.</li>
<li>Towards the end of the series, from January 2023 to October 2023, the Revenue demonstrated robust growth, from $32.91 billion to $35.98 billion, indicating a strong financial period for the corporation.</li>
</ul>
The last reported value in the series is $35.98 billion as of October 2023. Comparatively, from the initial reported revenue of $23.17 billion in December 2020, this signifies a growth rate of approximately 55% over almost three years.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706541965.2858.png" />
The series of data represents the evolution of the <a href="https://www.investopedia.com/terms/c/currentratio.asp">Current Ratio</a> for Starbucks Corporation (SBUX) from December 2020 up until October 2023.
<ul>
<li>Starting with a value of 1.06 on December 27, 2020, the Current Ratio experienced a slight increase, reaching 1.07 by March 28, 2021.</li>
<li>Subsequently, it saw a marginal dip to 1.02 by June 27, 2021.</li>
<li>A peak followed this decrease; by October 3, 2021, the ratio climbed to 1.2.</li>
<li>However, from January 2, 2022, a marked downturn ensued as the Current Ratio declined steadily from 0.813, going as low as 0.767 in October that year.</li>
<li>This trend broadly continued until the beginning of 2023, hitting a low of 0.75 on January 1.</li>
<li>From April 2, 2023, SBUX's Current Ratio started to gradually recover, closing at a value of 0.782 on October 1, 2023.</li>
</ul>
Between the start date in December 2020 and the end date in October 2023, the Current Ratio decreased by approximately 26%, indicating a declining tendency for Starbucks Corporation's ability to cover its short-term liabilities with its short-term assets over this period. The emphasis on more recent data shows a slight surge in the Current Ratio after hitting the lowest point in January 2023, though the overall performance remains below the starting measure.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706542086.59244.png" />
The trend in the Analyst Price Target for Starbucks Corporation (SBUX) indicates some notable fluctuations within the time frame from November 2021 to January 2024.
Herein, a gradual rise from a value of $124 in November 2021 to $124.29 by December 2021 is seen. However, this is followed by declines leading up to May 2022, where the Analyst Price Target hit a low of $99.52.
In June 2022, there was a slight drop to $94.69, but the value relatively stabilized, hinging around $94 and rising slightly to $98 by October 2022. Yet, the target saw a marginal decrease to $97.40 by November 2022. The beginning of 2023 marked a renewed upward trend.
Notably, the Price Target jumped to $108.55 in February, then it gradually rose to $112.27 in June before experiencing minor dips and rises for the rest of the year. By the end of the period in January 2024, the Analyst Price Target settled at $110, representing a decline of approximately 11.29% when compared to the start value in November 2021. Some key data points are:
<ul>
<li>Lowest Target: $94 (July 2022) &amp; 94.69 (June 2022)</li>
<li>Highest Target: $124.29 (December 2021)</li>
<li>Last Value: $110 (January 2024)</li>
<li>Growth Rate: -11.29% (From November 2021 to January 2024)</li>
</ul>
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706542197.7332.png" />
Fluctuating Yet Decelerating Trend in Starbucks' Stock Prices: August 2023-January 2024
The share prices of SBUX show a somewhat fluctuating trend over the period from August 2023 to January 2024:
<ul>
<li>On August 4, 2023, the share price started at $102.25.</li>
<li>There was a consistent decrease in the share prices over the month of August 2023, going down to $95.63 by August 25, 2023.</li>
<li>In early September 2023, there was a slight rebound as the price rose to $98.11, but the prices fell again to $91.64 by the end of September 2023.</li>
<li>Throughout October 2023, the share price fluctuated between the range of $91.36 and $94.06.</li>
<li>There was a significant surge in the prices in November 2023, reaching a peak price of $105.67 on November 17, 2023.</li>
<li>This surge was followed by a decline towards the end of November 2023 and throughout December 2023, with the price dipping to $95.53 by December 29, 2023.</li>
<li>In January 2024, the prices further declined, falling to $92.61 by January 26, 2024.</li>
</ul>
On overall, the data appears to show an overall declining trend in the share prices of SBUX from August 2023 to January 2024, despite a temporary spike in November 2023. However, this is not a consistent declining trend and there are periods of price increase within this timeframe. Therefore, I would characterize it as a decelerating trend due to the overall lower lows and lower highs. Here is a chart of SBUX's price over the past 180 days.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706542377.05225.png" />
Starbucks' Power Ratings: Analyzing Quality, Momentum, and Stability Trends
SBUX has an overall C rating, translating to a Neutral in our <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> system. It is ranked #15 out of the 42 stocks in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> category.
The POWR Ratings for SBUX reveal interesting insights along various dimensions. The three most noteworthy dimensions over the evaluated period are Quality, Momentum, and Stability.
<ul>
<li>Quality: This dimension consistently scores high for SBUX. In August 2023, quality stands at a noteworthy rating of 91 and it maintains strong values throughout the year. Even though it exhibits a slight downward trend, ending at 88 in January 2024, this is still a significantly high rating.</li>
<li>Momentum: Initially, in August 2023, momentum holds an impressively high rating of 81. However, over the next few months, it reveals a clear downward trend. From September 2023 to January 2024, the momentum rating decreases from 76 to 65.</li>
<li>Stability: This dimension shows slight fluctuations while maintaining reasonably high ratings throughout. It starts with a strong rating of 78 in August 2023 but ends with a reduced score of 74 in January 2024 despite reaching a peak of 80 in October 2023.</li>
</ul>
These patterns provide valuable information about Starbucks Corporation's quality, its recent trend in momentum, and enduring stability amidst variations.
<img src="https://storage.googleapis.com/sjn-charts/visualized-metrics/1706542439.03123.png" />
How does Starbucks Corporation (SBUX) Stack Up Against its Peers?
Other stocks in the Restaurants sector that may be worth considering are Rave Restaurant Group Inc. (<a href="https://stocknews.com/stock/RAVE">RAVE</a>), Nathan's Famous Inc. (<a href="https://stocknews.com/stock/NATH">NATH</a>), and Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY">DPUKY</a>) — they have better POWR Ratings.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
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<hr />
SBUX shares were trading at $93.26 per share on Monday afternoon, up $0.46 (+0.50%). Year-to-date, SBUX has declined -2.86%, versus a 2.83% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Subhasree Kar</h2> <img src='https:/wp-content/uploads/2021/06/Subhasree-Kar-HS2.jpg' style="float:left; padding:5px;width:125px;">Subhasree's keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master's degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.<a href="https://stocknews.com/authors/?author=subhasree-kar">More...</a>The post <a href=https://stocknews.com/news/sbux-rave-nath-dpuky-starbucks-sbux-strategies-ahead-of-quarterly-earnings/>Starbucks (SBUX): Strategies Ahead of Quarterly Earnings</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

Starbucks (SBUX): Strategies Ahead of Quarterly Earnings

Popular fast food chain McDonald's (MCD) reported better-than-expected earnings, but its revenue came below analyst estimates for the first time in nearly four years. Therefore, is it time to buy, hold, or avoid the stock now? Read on to learn my view… McDonald's Corporation (<a href="https://stocknews.com/stock/MCD/">MCD</a>) reported its fourth-quarter results on February 5. The company comfortably surpassed the consensus EPS estimate, but its revenue came below Wall Street estimates. In this piece, I have discussed why it could be prudent to wait for a better entry point in the stock.
For the fourth quarter, MCD's EPS was 4.4% above the consensus estimate, but its revenue was 0.7% lower than analyst estimates. This was its first quarterly sales miss in nearly four years. The company continued its stellar earnings history, beating the consensus EPS estimate in each of the trailing four quarters.
Same-store sales in the U.S. rose 4.3% during the fourth quarter and by 4.4% in the International Operated Markets (IOM), driven by the strong performance in the United Kingdom, Germany, and Canada. Its comparable sales in the International Developmental Licensed Markets &amp; Corporate rose just by 0.7% in the fourth quarter as sales suffered due to the war in the Middle East. Also, its systemwide sales rose 6% in the previous quarter.
MCD's President and CEO Chris Kempczinski said, "Our global comparable sales growth of 9% for the year is a testament to the tremendous dedication of the entire McDonald's System. Strong execution of our Accelerating the Arches strategy has driven over 30% comparable sales growth since 2019 as our talented crew members and the industry's best franchisees and suppliers have demonstrated proven agility with a relentless focus on the customer."
"By evolving the way we work across the System, we remain confident in the resilience of our business amid macro challenges that will persist in 2024," he added. The company has a target of 50,000 restaurants by 2027. Along with the restaurants it opened last year, MCD expects its net restaurant expansion in 2024 to contribute nearly 2% to system-wide sales growth.
MCD's sales in the Middle East have taken a hit due to boycotts and protests after its Israeli licensee donated free meals to members of the Israeli military. Anti-Israeli campaigners have been boycotting and protesting against several Western companies. MCD has about 5% of its total outlets in the Middle East. MCD is also witnessing an impact on its sales in France and Muslim-majority countries of Malaysia and Indonesia.
The company expects its operating margin to be between mid to high 40% this year. Its capital expenditures are expected to be between $2.5 billion and $2.7 billion, more than half of which will be used for new unit openings across its U.S. and IOM segments. MCD plans to open more than 2,100 restaurants this year, with nearly 500 of these openings in the U.S. and IOM segments.
The company aims to open more than 1,600 restaurants in its IDL segment this year, including 1,000 in China. Its free cash flow conversion is expected to be in the 90% range. Meanwhile, its interest expense this year is expected to increase between 9% and 11% compared to last year due to higher debt balances and interest rates.
MCD's stock has gained 5.9% over the past three months but declined 4% over the past nine months to close the last trading session at $284.65.
Here's what could influence MCD's performance in the upcoming months:
Robust Financials
MCD's revenues for the fourth quarter ended December 31, 2023, increased 8.1% year-over-year to $6.41 billion. Its operating income rose 8.5% over the prior-year quarter to $2.80 billion. The company's non-GAAP net income increased 12.7% year-over-year to $2.14 billion. Also, its non-GAAP EPS came in at $2.95, representing an increase of 13.9% year-over-year.
For the fiscal year ended December 31, 2023, MCD's revenues rose 10% year-over-year to $25.49 billion. Its operating income rose 24% over the prior-year period to $11.65 billion. The company's non-GAAP net income increased 17% year-over-year to $8.74 billion. Also, its non-GAAP EPS came in at $11.94, representing an increase of 18% year-over-year.
Favorable Analyst Estimates
Analysts expect MCD's EPS and revenue for fiscal 2024 to increase 4.2% and 5.6% year-over-year to $12.44 and $26.92 billion, respectively. Its fiscal 2025 EPS and revenue are expected to increase 8.8% and 6% year-over-year to $13.53 and $28.53 billion, respectively.
Stretched Valuation
In terms of forward non-GAAP P/E, MCD's 22.89x is 44.7% higher than the 15.82x industry average. Its 3.02x forward non-GAAP <a href="https://www.investopedia.com/terms/p/pegratio.asp">PEG</a> is 82.6% higher than the 1.65x industry average. Likewise, its 17.20x forward EV/EBITDA is 74.1% higher than the 9.88x industry average.
High Profitability
In terms of the trailing-12-month EBITDA margin, MCD's 47.58% is 334.2% higher than the 10.96% industry average. Likewise, its 30.08x trailing-12-month levered FCF margin is 455.3% higher than the industry average of 5.42x. Also, its 9.25% trailing-12-month Capex/Sales is 201.8% higher than the industry average of 3.06%.
POWR Ratings Reflect Uncertainty
MCD has an overall rating of C, equating to a Neutral in our <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. MCD has a D grade for Value, consistent with its stretched valuation. It has an A grade for Quality, in sync with its high profitability.
MCD's stock is trading below its 20-day moving average of $291.21 and above its 200-day moving average of $283.76, justifying its C grade for Momentum.
MCD is ranked #9 out of 42 stocks in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry. <a href="https://stocknews.com/stock/MCD/">Click here</a> to access MCD's Growth, Stability, and Sentiment ratings.
Bottom Line
MCD has robust growth plans for this year and beyond, with new restaurant openings over the past year contributing to systemwide sales. However, the company is witnessing a slower start this year due to comparison to a stronger first quarter last year and the rough weather in January. Also, the company expects the war to have a negative impact on Systemwide sales and revenue as long as it continues.
Furthermore, MCD trades at an expensive valuation. Given its mixed momentum and the overall uncertain operating environment, it could be wise to wait for a better entry point in the stock.
How Does McDonald's Corporation (MCD) Stack Up Against Its Peers?
MCD has an overall POWR Rating of C, equating to a Neutral rating. You may check out these B-rated stocks within the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry: Rave Restaurant Group, Inc. (<a href="https://stocknews.com/stock/RAVE/">RAVE</a>), Nathan's Famous, Inc. (<a href="https://stocknews.com/stock/NATH/">NATH</a>), and Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>). For exploring more Buy-rated Restaurants stocks, <a href="https://stocknews.com/category/restaurants/">click here</a>.
What To Do Next?
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these "death trap" stocks are lurking in your portfolio:
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<hr />
MCD shares were trading at $287.32 per share on Wednesday afternoon, up $2.67 (+0.94%). Year-to-date, MCD has declined -3.10%, versus a 4.70% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Dipanjan Banchur</h2> <img src='https:/wp-content/uploads/2021/11/Dipanjan-Banchur_headshots_3.jpg' style="float:left; padding:5px;width:125px;">Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.<a href="https://stocknews.com/authors/?author=dipanjan-banchur">More...</a>The post <a href=https://stocknews.com/news/mcd-rave-nath-dpuky-mcdonalds-mcd-financial-health-check-buy-hold-or-sell/>McDonald's (MCD) Financial Health Check: Buy, Hold, or Sell?</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

McDonald's (MCD) Financial Health Check: Buy, Hold, or Sell?

Popular restaurant chain Chipotle Mexican Grill (CMG) comprehensively beat analyst's earnings and revenue estimates during the fourth quarter. Should investors consider adding the stock to their portfolio now? Keep reading… Chipotle Mexican Grill, Inc. (<a href="https://stocknews.com/stock/CMG/">CMG</a>) reported its fourth-quarter results on February 6. The company comfortably surpassed Wall Street's EPS and revenue estimates. In this piece, I have discussed why it could be prudent to wait for a better entry point in the stock now despite the better-than-expected results.
For the fourth quarter, CMG's EPS was 6.5% above the consensus estimate, and its revenue was 1.1% higher than the analyst estimates. The company continued its stellar earnings history, beating the consensus EPS estimate in each of the trailing four quarters.
The company opened 121 restaurants during the quarter, compared to 100 openings in the prior-year quarter. Its restaurants at the end of December 31, 2023, stood at 3,437, compared to 3,187 at the end of December 31, 2022. In addition, its fourth-quarter comparable restaurant sales increase was 8.4%, compared to 5.6% in the prior year quarter. Digital sales during the quarter stood at 36%.
For fiscal 2023, its comparable restaurant sales grew 7.9%, and digital sales represented 37% of sales. It opened 271 new restaurants, including 238 Chipotlanes. CMG's Chairman and CEO Brian Niccol said, "2023 was an outstanding year where we delivered strong transaction growth driven by throughput and menu innovation, opened a record number of new restaurants, surpassed $3 million in AUVs, and formed our first international partnership."
"I am more confident than ever that we have the right people and the right strategy to achieve our long-term growth goals of reaching 7,000 restaurants in North America, $4 million in AUVs, expanding our industry-leading margins and returns and furthering our purpose of Cultivating a Better World globally," he added.
For fiscal 2024, CMG's management anticipates comparable restaurant sales growth in the mid-single digit range. Also, the company expects to open 285 to 315 new restaurants this year.
Over the past year, the stock has gained 60% and 40.8% over the past six months to close the last trading session at $2,620.48.
Here's what could influence CMG's performance in the upcoming months:
Robust Financials
CMG's total revenue for the fiscal fourth quarter ended December 31, 2023, increased 15.4% year-over-year to $2.52 billion. Its adjusted net income rose 23.7% over the prior-year quarter to $286.18 million. The company's adjusted income from operations increased 21.5% year-over-year to $274.86 million. Also, its adjusted EPS came in at $10.36, representing an increase of 25% year-over-year.
For the fiscal year ended December 31, 2023, CMG's total revenue rose 14.3% year-over-year to $9.87 billion. Its net cash provided by operating activities increased 34.8% over the prior-year period to $1.78 billion. The company's adjusted net income increased 35.1% year-over-year to $1.24 billion. In addition, its adjusted EPS came in at $44.86, representing an increase of 36.9% year-over-year.
Favorable Analyst Estimates
Analysts expect CMG's EPS and revenue for fiscal 2024 to increase 18.6% and 13.7% year-over-year to $53.18 and $11.22 billion, respectively. Its fiscal 2025 EPS and revenue are expected to increase 21.7% and 13.1% year-over-year to $64.72 and $12.69 billion, respectively.
Stretched Valuation
In terms of forward non-GAAP P/E, CMG's 49.27x is 207.7% higher than the 16.01x industry average. Its 2.43x forward non-GAAP <a href="https://www.investopedia.com/terms/p/pegratio.asp">PEG</a> is 46.8% higher than the 1.66x industry average. Likewise, its 39.68x forward EV/EBIT is 180.4% higher than the 14.15x industry average.
High Profitability
In terms of the trailing-12-month EBITDA margin, CMG's 19.51% is 79% higher than the 10.90% industry average. Likewise, its 9.47x trailing-12-month levered FCF margin is 73% higher than the industry average of 5.47x. Also, its 16.27x trailing-12-month EBIT margin is 115.2% higher than the industry average of 7.56x.
POWR Ratings Reflect Uncertainty
CMG has an overall rating of C, equating to a Neutral in our <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. CMG has an F grade for Value, consistent with its stretched valuation. It has a B grade for Quality, in sync with its high profitability.
CMG is ranked #17 out of 42 stocks in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry. <a href="https://stocknews.com/stock/CMG/">Click here</a> to access CMG's Growth, Momentum, Stability, and Sentiment ratings.
Bottom Line
After ending 2023 on a solid note, CMG said that unusually cold weather hurt sales in January. The company has grand plans to double its store count, reaching 7,000 locations at some point in the future. However, with consumer prices for food away from home category showing a rise in December, consumers are likely to have pulled back spending on eating out.
Despite the company's promising long-term growth plans, it trades at an expensive valuation. Therefore, it could be wise to wait for a better entry point in the stock.
How Does Chipotle Mexican Grill, Inc. (CMG) Stack Up Against Its Peers?
CMG has an overall POWR Rating of C, equating to a Neutral rating. You may check out these B-rated stocks within the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry: Rave Restaurant Group, Inc. (<a href="https://stocknews.com/stock/RAVE/">RAVE</a>), Nathan's Famous, Inc. (<a href="https://stocknews.com/stock/NATH/">NATH</a>), and Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>). For exploring more Buy-rated Restaurants stocks, <a href="https://stocknews.com/category/restaurants/">click here</a>.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
<a href="https://report.stocknews.com/sign-up/stock-market-outlook-2024/?formplacement=artbotad_smo24_rep%22">2024 Stock Market Outlook &gt;</a>

<hr />
CMG shares were trading at $2,633.02 per share on Friday morning, up $12.54 (+0.48%). Year-to-date, CMG has gained 15.13%, versus a 5.17% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Dipanjan Banchur</h2> <img src='https:/wp-content/uploads/2021/11/Dipanjan-Banchur_headshots_3.jpg' style="float:left; padding:5px;width:125px;">Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.<a href="https://stocknews.com/authors/?author=dipanjan-banchur">More...</a>The post <a href=https://stocknews.com/news/cmg-rave-nath-dpuky-after-q4-earnings-beat-should-investors-add-chipotle-cmg-to/>After Q4 Earnings Beat, Should Investors Add Chipotle (CMG) to Their Portfolios?</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

After Q4 Earnings Beat, Should Investors Add Chipotle (CMG) to Their Portfolios?

The restaurant industry is poised to thrive this year, owing to easing inflation, a considerable increase in fast-casual preferences, and advanced technology. Given this backdrop, quality restaurant stocks Compass Group PLC (CMPGY), Arcos Dorados Holdings (ARCO), and Domino's Pizza (DPUKY) could be wise portfolio additions for 2024. Read on… The restaurant industry is benefitting from easing inflation and the heightened consumer zest for dining experiences. Moreover, the industry is anticipated to remain resilient due to technological advancements and the increasing preferences for fast-casual eateries fueled by easy mobile ordering and takeaway options.
Given this backdrop, fundamentally robust restaurant stocks Compass Group PLC (<a href="https://stocknews.com/stock/CMPGY/">CMPGY</a>), Arcos Dorados Holdings Inc. (<a href="https://stocknews.com/stock/ARCO/">ARCO</a>), and Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>) could be solid buys now.
In 2023, the restaurant industry successfully navigated inflation and maintained stability. According to the National Restaurant Association (NRA), <a href="https://restaurant.org/research-and-media/research/economists-notebook/economic-indicators/total-restaurant-industry-sales/">restaurant sales</a> witnessed uninterrupted growth for the tenth consecutive month, reaching $94.6 billion in December. The past ten months saw an 8.3% increase in eating and drinking place sales, surpassing the non-restaurant retail sectors' 2.4% gain, reflecting consumers' continued preference for dining out and experience-centric spending.
The restaurant and food service industry is expected to continue its growth trajectory in 2024, with <a href="https://www.seafoodsource.com/news/premium/foodservice-retail/restaurant-sales-to-exceed-usd-1-1-trillion-in-2024-experts-forecast">sales estimated to surpass $1 trillion</a>.
The prevailing consumer behavior reflects a distinct inclination toward <a href="https://resos.com/blog/trends-in-the-restaurant-industry-for-2024">value-centric purchases</a>, with prime emphasis on experience and premium quality. According to The Food Institute insights, consumers are increasingly price-sensitive, exploring multiple channels to find value.
Moreover, with an evident shift toward fast-casual dining, fostered by the convenience of mobile orders and takeout services, this transformation extends beyond a mere pandemic-era phenomenon toward a consistent change in customer behavior.
Furthermore, technology is predicted to overhaul <a href="https://www.olo.com/blog/front-of-house-restaurant-technology">front-of-house operations</a> throughout the restaurant industry. A higher number of operators plan to invest in tech in 2024 compared to last year, especially in products that enhance the customer experience (60%) and optimize kitchen efficiency (52%). The year is set to observe escalated adoption of <a href="https://www.spectrio.com/digital-menu-boards/2024-digital-menu-board-trends-you-need-to-know/">digital menus</a> and ordering systems, often integrated with customer-facing tablets or mobile applications.
The technological pivot holds substantial potential to be a game-changer for the restaurant industry, introducing swiftly growing efficiencies. Restaurants demonstrating <a href="https://business.bofa.com/en-us/content/restaurant-industry-report/restaurant-industry-outlook.html">adaptability to evolving consumer behaviors</a> and rapidly advancing technology are expected to register noticeable growth throughout the year.
The U.S. foodservice market size is estimated to reach $1.37 trillion, <a href="https://www.mordorintelligence.com/industry-reports/us-food-service-restaurant-market">growing at a CAGR of 10.7% by 2029</a>.
Given the industry tailwinds, it's time to examine the fundamentals of the three stocks to buy in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry, starting with the third in line.
Stock #3: Compass Group PLC (<a href="https://stocknews.com/stock/CMPGY/">CMPGY</a>)
Headquartered in Chertsey, the United Kingdom, CMPGY operates as a food and support services company in North America, Europe, and internationally. The company offers support services; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others.
On February 7, CMPGY completed c.$100 million of its share buyback program, delivering long-term, compounding shareholder returns.
On January 22, CMPGY acquired CH&amp;CO, a provider of premium contract and hospitality services in the U.K. and Ireland, for an initial enterprise value of $600 million with an additional earn-out over the two years following closing, dependent on the profit growth of the business.
The acquisition is in line with the company's longstanding strategy to create value through disciplined capital allocation. CMPGY's strong cash generation and balance sheet give CMPGY the flexibility to invest in organic growth and acquire high-quality businesses with exceptional management teams, enabling us to accelerate growth further and enhance shareholder returns.
Its annualized dividend of $0.71 per share translates to a dividend yield of 2.53% on the current share price. Its four-year average yield is 1.34%. CMPGY's dividend payments have grown at a 2.2% CAGR over the past five years.
CMPGY's trailing-12-month cash from operations of $2.53 billion is 849.8% higher than the industry average of $266.65 million. Its trailing-12-month ROCE, ROTC, and ROTA of 23.87%, 12.21%, and 7.47% are 108.5%, 98.2%, and 81.9% higher than the industry averages of 11.45%, 6.16%, and 4.10%, respectively.
For the fiscal year that ended September 30, 2023, CMPGY's underlying revenue and underlying operating profit increased 16% and 27.5% year-over-year to $38.22 billion and $2.59 billion, respectively. Moreover, its underlying EBITDA stood at $3.62 billion, up 25% from the year-ago value.
For the same year, underlying profit attributable to equity shareholders and underlying <a href="https://www.investopedia.com/terms/e/eps.asp">earnings per share</a> increased 33.9% and 36.7% from the previous year to $1.83 billion and 105.20 cents, respectively.
Street expects CMPGY's revenue and EPS for the fiscal year ending September 2024 to increase 8.3% and 11.8% year-over-year to $42.35 billion and $1.19, respectively.
The stock has gained 25.6% over the past year to close the last trading session at $28.21. Over the past three months, it has gained 11.4%.
CMPGY's <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> reflect its positive prospects. The stock has an overall B rating, equating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has an A grade for Stability. Within the 42-stock <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry, it is ranked #4.
To see additional POWR Ratings for Growth, Value, Momentum, Sentiment, and Quality for CMPGY, <a href="https://stocknews.com/stock/CMPGY/">click here</a>.
Stock #2: Arcos Dorados Holdings Inc. (<a href="https://stocknews.com/stock/ARCO/">ARCO</a>)
Headquartered in Montevideo, Uruguay, ARCO operates as a franchisee of McDonald's restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 20 countries and territories.
It pays an annual dividend of $0.16 per share, which translates to a dividend yield of 1.33% on the current share price. Its four-year average yield is 1.25%. ARCO's dividend payments have grown at CAGRs of 34.7% and 31.3% over the past three and five years, respectively.
ARCO's trailing-12-month CAPEX/Sales of 7.69% is 151.5% higher than the industry average of 3.06%. Its trailing-12-month ROCE, ROTC, and ROTA of 52.68%, 10.09%, and 6.32% are 360.2%, 63.8%, and 54.1% higher than the industry averages of 11.45%, 6.16%, and 4.10%, respectively.
For the fiscal third quarter that ended September 30, 2023, ARCO's total revenues and operating income increased 22.1% and 23.2% year-over-year to $1.13 billion and $91.08 million, respectively. Moreover, its adjusted EBITDA stood at $129.12 million, up 25.8% from the year-ago quarter.
For the same quarter, net income attributable to ARCO and basic net income per common share increased 27.4% and 27.3% from the prior-year quarter to $59.72 million and $0.28, respectively.
Street expects ARCO's revenue and EPS for the fiscal year ending December 2024 to increase 6.1% and 14% year-over-year to $4.56 billion and $0.88, respectively. The company surpassed consensus revenue estimates in each of the trailing four quarters and consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 48.2% over the past year to close the last trading session at $12.03. Over the past nine months, it has gained 43.9%.
ARCO's robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to Buy in our proprietary rating system.
ARCO has an A grade for Sentiment and a B for Value. It is ranked #3 within the same industry.
<a href="https://stocknews.com/stock/ARCO/">Click here</a> for the additional POWR Ratings for ARCO (Growth, Momentum, Stability, and Quality).
Stock #1: Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>)
Headquartered in Milton Keynes, the United Kingdom, DPUKY owns, operates, and franchises Domino's Pizza stores. It operates stores in the United Kingdom and the Republic of Ireland, as well as leases its stores. 
Its annualized dividend of $0.25 per share translates to a dividend yield of 2.88% on the current share price. Its four-year average yield is 2.84%. DPUKY's dividend payments have grown at CAGRs of 1.1% and 3.5% over the past three and five years, respectively.
DPUKY's trailing-12-month asset turnover ratio of 1.32x is 35.3% higher than the industry average of 0.98x. Its trailing-12-month ROTC and ROTA of 17.84% and 25.03% are 189.5% and 509.9% higher than the industry averages of 6.16% and 4.10%, respectively.
For the fiscal third quarter ending September 24, 2023, its total system sales came at £363.70 million ($459.31 million), up 5.5% year-over-year. As of November 9, 2023, it had 1,304 stores in the U.K. and Ireland.
For the six months that ended June 25, 2023, DPUKY's underlying revenue and underlying gross profit increased 19.6% and 20.9% from the prior-year period to £332.90 million ($420.42 million) and £153.20 million ($193.48 million), respectively.
For the same period, underlying profit for the period and underlying earnings per share stood at £39.60 million ($50.01 million) and 9.50 pence, respectively. Moreover, its underlying EBITDA stood at £68.70 million ($86.76 million), up 8.2% from the year-ago period.
Street expects DPUKY's revenue for the fiscal year ending December 2024 to increase 4.9% year-over-year to $878.60 million.
The stock has gained 14.7% over the past nine months to close the last trading session at $8.74. Over the past year, it has gained 9%.
DPUKY's solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system.
DPUKY has an A grade for Stability. Within the same industry, it is ranked #2.
Beyond what we've stated above, we have also rated the stock for Growth, Value, Momentum, Sentiment, and Quality. Get all ratings of DPUKY <a href="https://stocknews.com/stock/DPUKY/">here</a>.
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<hr />
CMPGY shares were unchanged in premarket trading Monday. Year-to-date, CMPGY has gained 2.66%, versus a 5.45% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Neha Panjwani</h2> <img src='https:/wp-content/uploads/2024/01/Neha-Panjwani_Headshot-1.jpeg' style="float:left; padding:5px;width:125px;">From her school days, Neha harbored a profound fascination for finance, a passion that steered her toward a career as an investment analyst following the completion of her bachelor's degree in commerce. Currently enrolled in the CFA program, Neha is dedicated to further enriching her comprehension of investment fundamentals.

Neha's primary objective is to aid retail investors in discerning optimal investment opportunities by diligently evaluating crucial aspects of financial instruments, with a primary focus on stocks and ETFs. Her commitment lies in empowering individuals to make informed and strategic investment decisions in the dynamic world of finance.<a href="https://stocknews.com/authors/?author=neha-panjwani">More...</a>The post <a href=https://stocknews.com/news/cmpgy-arco-dpuky-3-hot-restaurant-picks-for-your-2024-radar/>3 Hot Restaurant Picks for Your 2024 Radar</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

3 Hot Restaurant Picks for Your 2024 Radar

The restaurant industry could have a smooth ride ahead thanks to technological advancements and stable consumer spending. Therefore, promising restaurant stocks Domino's Pizza (DPUKY), Nathan's Famous (NATH), and Rave Restaurant (RAVE) could be solid portfolio additions now. Read more… The restaurant industry is embracing technology to improve customer experiences, lower labor costs, and boost profits, thereby increasing efficiency. Therefore, quality restaurant stocks Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>), Nathan's Famous, Inc. (<a href="https://stocknews.com/stock/NATH/">NATH</a>), and Rave Restaurant Group, Inc. (<a href="https://stocknews.com/stock/RAVE/">RAVE</a>) could be wise additions to your portfolio now.
Before delving deeper into their fundamentals, let's discuss what's happening in the restaurant industry.
<a href="https://www.qsrmagazine.com/story/revolutionizing-the-restaurant-sector-with-artificial-intelligence-in-2024/">AI is revolutionizing the restaurant industry</a> by enhancing customer interactions and operational efficiencies. AI in the global food and beverage industry, valued at 9.68 billion, is projected to reach $49 billion in five years, registering a <a href="https://www.mordorintelligence.com/industry-reports/artificial-intelligence-in-food-and-beverages-market">38.3% CAGR</a>.
Moreover, the global fast-food sector should witness steady growth amid rising consumer spending power, rapid globalization, industrialization, and urbanization. The global fast-casual restaurant market size is estimated to expand at a <a href="https://www.openpr.com/news/3429924/fast-casual-restaurants-market-worth-293-80-billion-by-2030">CAGR of 8.3% to $293.80 million</a> by 2030.
In addition, the U.S. full-service restaurant market is predicted to reach $554.12 billion by 2029, expanding at an <a href="https://www.mordorintelligence.com/industry-reports/united-states-full-service-restaurants-market/market-size">11.3% CAGR</a>. Investors' interest in restaurant stocks is evident from the AdvisorShares Restaurant ETF's (<a href="https://stocknews.com/stock/EATZ/">EATZ</a>) 28.9% returns over the past six months.
Given the industry's growth prospects, it's time to examine the fundamentals of the three stocks to buy in the <a href="https://stocknews.com/category/restaurants/">Restaurants</a> industry, starting with the third in line.
Stock #3: Domino's Pizza Group plc (<a href="https://stocknews.com/stock/DPUKY/">DPUKY</a>)
Headquartered in Milton Keynes, the United Kingdom, DPUKY owns, operates, and franchises Domino's Pizza stores. It operates stores in the United Kingdom and the Republic of Ireland, as well as leases its stores.
DPUKY's trailing-12-month net income margin of 16.92% is 260.9% higher than the 4.69% industry average. Its trailing-12-month <a href="https://www.investopedia.com/terms/l/levered-free-cash-flow.asp#a__text_Levered_20free_20cash_20flow_20_LFCF__20is_20the_20amount_20of_20money_before_20debt_20payments_20are_20made_">levered FCF</a> margin of 15.48% is 182.1% higher than the 5.49% industry average. Also, its 18.04% trailing-12-month Return on Total Capital is 197.6% higher than the 6.06% industry average.
For the year ended December 31, 2023, DPUKY's underlying revenue and underlying gross profit increased 13.2% and 15.6% from the prior-year period to £679.80 million ($858.73 million) and £316.20 million ($399.43 million), respectively.
For the same period, underlying profit and underlying earnings per share stood at £75.70 million ($95.62 million) and 18.40 pence, respectively. Moreover, its underlying EBITDA stood at £138.10 million ($174.45 million), up 6.1% from the year-ago period.
Street expects DPUKY's revenue for the year ending December 31, 2024, to increase 3% year-over-year to $895.36 million. Over the past year, the stock has gained 34.8% to close the last trading session at $9.26.
DPUKY's <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> reflect this promising outlook. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
DPUKY has an A grade for Stability and a B for Quality. Within the <a href="https://stocknews.com/category/restaurants/%22">Restaurants</a> industry, it is ranked #3 out of 42 stocks. To see DPUKY's additional ratings for Growth, Value, Momentum, and Sentiment, <a href="https://stocknews.com/stock/DPUKY/">click here</a>.
Stock #2: Nathan's Famous, Inc. (<a href="https://stocknews.com/stock/NATH/">NATH</a>)
NATH is a licensor, wholesaler, and retailer of Nathans brand products, notably Nathans Beef Hot Dogs. The company's segments include Branded Product Program; Product licensing; and Restaurant operations. Its products are available in approximately 79,000 locations.
NATH's trailing-12-month EBIT margin of 23.44% is 207.3% higher than the industry average of 7.63%. Its trailing-12-month asset turnover ratio of 2.20x is 119.9% higher than the industry average of 1x. Its 24.31% trailing-12-month EBITDA margin is 123.9% higher than the 10.88% industry average.
During the fiscal third quarter that ended December 24, 2023, NATH's total revenues increased 3.3% year-over-year to $28.89 million. Its income from operations came in at $5.14 million. Moreover, the company's net income and income per share stood at $2.61 million and $0.64 for the quarter, respectively.
Shares of NATH have gained marginally over the past month to close the last trading session at $69.11.
NATH's strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #2 in the same industry. It has an A grade for Quality and a B for Sentiment. <a href="https://stocknews.com/stock/NATH/">Click here</a> to see NATH's additional ratings for Growth, Value, Momentum, and Stability.
Stock #1: Rave Restaurant Group, Inc. (<a href="https://stocknews.com/stock/RAVE/">RAVE</a>)
RAVE operates and franchises pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising; Pie Five Franchising; and Company-Owned Restaurants.
RAVE's trailing-12-month gross profit margin of 67.20% is 87.1% higher than the industry average of 35.91%. Its trailing-12-month levered FCF margin of 16.14% is 194.2% higher than the 5.49% industry average. Also, its trailing-12-month Return on Total Assets of 13.40% is 209.4% higher than the industry average of 4.33%.
During the second quarter, which ended December 24, 2023, RAVE's revenues came in at $2.79 million. The company's net income and net income per share rose 58.9% and 100% from a year-ago quarter to $553,000 and $0.04, respectively. Also, its adjusted EBITDA stood at $582,000.
Analysts expect RAVE's EPS to grow 10% per annum for the next five years. RAVE shares have gained 45.1% over the past year to close the last trading session at $2.09.
It's no surprise that RAVE has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Quality and a B for Sentiment. It is ranked first in the Restaurants industry.
Beyond what is stated above, we've also rated RAVE for Growth, Value, Momentum, and Stability. Get all RAVE ratings <a href="https://stocknews.com/stock/RAVE/">here</a>.
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<hr />
DPUKY shares were trading at $9.26 per share on Wednesday afternoon, down $0.39 (-4.04%). Year-to-date, DPUKY has declined -4.04%, versus a 9.79% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Rashmi Kumari</h2> <img src='https:/wp-content/uploads/2022/10/Rashmi-Kumari_headshot_2-1.jpg' style="float:left; padding:5px;width:125px;">Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.<a href="https://stocknews.com/authors/?author=rashmi-kumari">More...</a>The post <a href=https://stocknews.com/news/dpuky-nath-rave-3-promising-restaurant-stocks-to-buy-today/>3 Promising Restaurant Stocks to Buy Today</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>