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Barron's: 8 Restaurant Stocks Ready to Rally

Fast foodgreasy fried restaurant take out as onion rings burger and hot dogs with fried chicken french fries and pizza

Friday, 05 October 2018 03:00 PM

Shares of big fast-food chains look like they are long overdue for a mouth-watering rally.

Keybanc Capital Markets’ Eric Gonzalez told Barron’s there are eight stocks investors should watch:

  1. McDonald’s(MCD)
  2. Starbucks (SBUX)
  3. Restaurant Brands International (QSR)
  4. Chipotle Mexican Grill (CMG)
  5. Yum Brands (YUM)
  6. Bojangles (BOJA)
  7. Dunkin’ Brands Group (DNKN)
  8. Wendy’s (WEN)

Gonzalez initiated coverage on the eight fast-food companies Thursday, writing that the group has largely underperformed the broader market and retail sector this year, “somewhat uncharacteristic of a group that has outperformed in each of the previous three years and are arguably better businesses today than they have been in years,” Barron’s quoted him as saying.

Gonzalez’s favorites are those companies that boast a mix of “credible” same-store sales catalysts and “superior” system-wide sales growth.

Meanwhile, a recent government study certainly provides evidence that consumers are hooked on fast food at their favorite eateries.

More than a third of American adults consume restaurant fast food on any given day, based on government survey data for 2013-2016. Men are most likely eat fast food at lunch. Women are most likely to favor fast food as a snack, Bloomberg reported.

Of course, taste and convenience come with the risk of “high caloric intake” and “poor diet quality,” according to the Centers for Disease Control. It’s been estimated adults consume more than 11 percent of their total daily calories from fast food, the CDC said.

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Shares of big fast-food chains look like they are long overdue for a mouth-watering rally.
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Friday, 05 October 2018 03:00 PM
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