TD Cowen trims PTs of quick-service restaurants on slowing customer traffic

Jack In The Box

12/04/2024 14:44

** TD Cowen trims PTs on quick-service restaurants like Jack
in the Box  JACK.O , McDonald's  MCD.N  and Restaurant Brands
 QSR.TO   QSR.N , citing a slowdown in customer traffic in 1H24
    ** Brokerage notes pricing at quick service chains outpaced
fast-casual restaurants, while traffic lagged at the former,
worsening quick service's exposure to lower-income consumers
    ** Adds that its survey data suggests middle-income
consumers are opting to dine at fast-casual restaurants, given
stronger perceptions of "what you get vs what you pay for"
    ** Brokerage trims PT on MCD to $305 from $325; PT on QSR
down to $84 from $90 and JACK's PT cut to $73 from $82
    ** Points out that market leader MCD has intensified value
activity among quick service, leaning into sub-$3 value price
points
    ** Quick service is intensifying focus on value, giving us
optimism that quick service traffic can improve in 2H24- analyst
Andrew Charles
    ** So far this year, JACK down ~26%, MCD down ~9% and QSR
down about 8%
    

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.Mishra@thomsonreuters.com))