Bernstein sees signs of demand rebound for US restaurants in 2025

Darden Restaurants

22/01/2025 13:09

** Bernstein analysts see initial signs of demand recovery
for U.S. restaurants in 2025 on stable food-away-from-home
trends
    ** Brokerage upgrades Olive Garden-operator Darden
Restaurants  DRI.N  to "outperform" from "market-perform";
raises PT to $215 from $180
    ** Says DRI will benefit from improved demand among
middle-income groups and partnership with food delivery arm of
Uber Technologies  UBER.N  
    ** Adds that heightened promotional environment for the
sector will continue in H1, but ease off in H2
    ** Bernstein notes Chipotle Mexican Grill  CMG.N  and
Starbucks  SBUX.O  less exposed to risks from a potential higher
adoption of weight-loss drugs
    ** Chinese tariff-related policies may shake profitability
for the sector, but effects are likely to materialize only
beyond 2026 - Bernstein analyst Danilo Gargiulo
    ** Downgrades Yum Brands  YUM.N  to "market-perform" from
"outperform", citing intense value wars to pressure KFC and
Pizza Hut restaurants
    ** For McDonald's  MCD.N , brokerage believes aggressive
value orientation will continue to attract traffic and fuel
recovery in U.S. 
    ** DRI, YUM stock rose 22.4% and 2.7% in 2024, respectively,
while MCD fell 2.2%

 (Reporting by Aamir Sohail in Bengaluru)
 ((Aamir.Sohail@thomsonreuters.com;))