Restaurants: Wedbush cuts PTs on COVID-19 pressure, commodity, labor costs

Dennys

25/08/2021 13:33

** Wedbush says full-service restaurants' current valuation
are below pre-Covid levels
    ** Brokerage says full-service restaurants' current
valuation reflect increase in uncertainty of near and
medium-term revenue trends due to surge in COVID-19
    ** Wedbush adds that there is more uncertainty in near and
medium term margin outlook due to higher commodity and labor
costs
    ** Rewards outweigh risks of full-chain restaurants at
current valuations - Wedbush
    ** Brokerage expects increase in menu prices across
full-chain restaurants as they exit 2021, if commodity and labor
inflation persist
    ** Brokerage maintains "neutral" rating on Darden
Restaurants  DRI.N  and $150 PT; Wedbush maintains "outperform"
rating and cuts PT of the following companies
    
    
 Company            New PT  Old PT
 BJ's Restaurants   $52     $68
 Inc                        
 Cheesecake         $55     $70
 Factory Inc                
 Chuy's Holdings    $40     $50
 Inc                        
 Denny's Corp       $21     $22
 Dine Brands        $97     $113
 Global Inc                 
 Brinker            $69     $76
 International Inc          
 Texas Roadhouse    $105    $122
 Inc                        
 
    

 (Reporting by Siddarth S)
 ((Siddarth.s@thomsonreuters.com;))