Barclays on U.S. Restaurants: 3Q11 Restaurant Preview...Burgers & Brew
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Price: $266.44 +0.08%
Rating Summary:
28 Buy, 19 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 9 | Down: 14 | New: 50
Rating Summary:
28 Buy, 19 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 9 | Down: 14 | New: 50
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Barclays on U.S. Restaurants: 3Q11 Restaurant Preview...Burgers & Brew
Barclays analyst, Jeffrey A. Bernstein, says, "...In terms of fundamentals, industry comps have been more resilient than expected of late. That said, we believe food inflation will continue to pressure EPS, while incremental pricing not enough to offset such pressures. Looking to 2012, we view the current acceleration in consensus EPS growth aggressive, rather expecting growth to remain below long-term targets."
"The sector depreciated 17% in 3Q11. QSR and specialty outperformed the S&P (down 9%, 10% & 14%, respectively), while all outperformed casual dining (down 25%). While we continue to believe casual dining best positioning upon return to an improving macro, in the near term we continue to believe QSR (and specialty) better insulated from macro pressures, as demonstrated during the 2008-2009 recession. In QSR, McDonald's (NYSE: MCD) continues to report industry-leading fundamentals though mitigated by an easing of FX benefits and ongoing European concerns. Wendy's (NYSE: WEN) offers greater risk/reward with a new CEO, Arby's sold, Wendy's back to positive comps with a premium focus, and $500m in cash. Our specialty concepts continue to report the strongest comps, and Buffalo Wild Wings (Nasdaq: BWLD) most compelling on valuation, with the others vulnerable to even a modest deceleration. In casual dining, Brinker (NYSE: EAT) offers the greatest risk/reward on improving comps and margins while EPS growth insulated by share repo. Of our Equal Weight rated stocks, we're most cautious on Sonic (Nasdaq: SONC), P.F. Changs (Nasdaq: PFCB) & Panera (Nasdaq: PNRA), while most bullish on YUM Brands (NYSE: YUM), Cheesecake Factory (Nasdaq: CAKE) & Starbucks (Nasdaq: SBUX)."
Barclays analyst, Jeffrey A. Bernstein, says, "...In terms of fundamentals, industry comps have been more resilient than expected of late. That said, we believe food inflation will continue to pressure EPS, while incremental pricing not enough to offset such pressures. Looking to 2012, we view the current acceleration in consensus EPS growth aggressive, rather expecting growth to remain below long-term targets."
"The sector depreciated 17% in 3Q11. QSR and specialty outperformed the S&P (down 9%, 10% & 14%, respectively), while all outperformed casual dining (down 25%). While we continue to believe casual dining best positioning upon return to an improving macro, in the near term we continue to believe QSR (and specialty) better insulated from macro pressures, as demonstrated during the 2008-2009 recession. In QSR, McDonald's (NYSE: MCD) continues to report industry-leading fundamentals though mitigated by an easing of FX benefits and ongoing European concerns. Wendy's (NYSE: WEN) offers greater risk/reward with a new CEO, Arby's sold, Wendy's back to positive comps with a premium focus, and $500m in cash. Our specialty concepts continue to report the strongest comps, and Buffalo Wild Wings (Nasdaq: BWLD) most compelling on valuation, with the others vulnerable to even a modest deceleration. In casual dining, Brinker (NYSE: EAT) offers the greatest risk/reward on improving comps and margins while EPS growth insulated by share repo. Of our Equal Weight rated stocks, we're most cautious on Sonic (Nasdaq: SONC), P.F. Changs (Nasdaq: PFCB) & Panera (Nasdaq: PNRA), while most bullish on YUM Brands (NYSE: YUM), Cheesecake Factory (Nasdaq: CAKE) & Starbucks (Nasdaq: SBUX)."
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