Brokerages expect restaurant cos to post strong sales in Q2
18/07/2023 13:42
** Piper Sandler sees mid-to-large-cap Full Service
Restaurant (FSR) chains delivering stronger sales compared to
individual restaurants ahead of Q2 earnings from restaurant cos
** Brokerage sees FSR yielding market share to Quick Service
Restaurants (QSR) like McDonald's MCD.N and Domino's Pizza
DPZ.N , among others
** Piper Sandler initiates rating on FSR cos Texas Roadhouse
TXRH.O , First Watch Restaurant Group FWRG.O , and Dave &
Buster's Entertainment PLAY.O with "overweight"
** Rates Olive Garden-parent Darden Restaurants DRI.N
"neutral"; says co is "well-positioned" to take industry share
over time and outperform peers despite a possible recession in
H2
** RBC Capital Markets raises PT on MCD, DPZ and Chipotle
Mexican Grill CMG.N , as higher pricing and promotions are
expected to help cos post "solid" Q2 sales
** Raymond James picks FSRs Dave & Buster's, First Watch,
Bloomin' Brands BLMN.O , Brinker International EAT.N and CMG
as its "top ideas"
** Expects average per order gains to moderate in H2 as cos
reign in menu price hikes
** Brokerage sees benefits from easing commodity costs such
as chicken wings, cooking oils, cheese and corn in Q2, with the
exception of beef
** Up to last close, the S&P Composite 1500 Restaurants sub
index .SPCOMREST was up ~14% YTD
(Reporting by Juveria Tabassum in Bengaluru)
((Juveria.Tabassum@thomsonreuters.com;))