Credit Suisse Upgrades Del Frisco's Restaurant (DFRG) to Outperform; To Benefit Most from Trump Individual Tax Cuts
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Credit Suisse upgraded Del Frisco's Restaurant (NASDAQ: DFRG) from Neutral to Outperform with a price target of $19.00 (from $15.00), saying it should benefit most from individual tax cuts, which are skewed to high-income consumers under Trump’s proposal.
Analyst Jason West commented, "We view DFRG as the most effective way (in restaurants) to gain exposure to several of Trump’s stated priorities, notably individual and corporate tax reform. Under Trump’s proposal, consumers in the top two income quintiles would see their after-tax incomes rise by ~2.2% and ~6.6%, respectively, vs. 0.8% to 1.8% for those in the bottom three quintiles. As the most upscale chain within our coverage, DFRG is best positioned to benefit from a high-income consumer with more disposable income. Revitalized business spending from a corporate tax cut could also drive an uplift in DFRG’s private dining business (~15% of sales excluding the Grille)."
Shares of Del Frisco's Restaurant closed at $16.35 yesterday.
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