RBC Capital Weighs in on US Restaurants after Brexit (MCD) (YUM) (SBUX) (QSR)

RBC Capital analyst David Palmer weighed in on US Restaurants after Brexit. Palmer sees major implications from the Brexit vote: 1) Currency impact from the pound and euro, 2) potential consumer confidence weakness in Europe and US as a result of geo-political uncertain and financial market turbulence, and 3) rising potential appeal for names with "staple like" demand and/or high dividend.

Those with the highest exposure are McDonald's (NYSE: MCD) (9% and 41% for UK and Europe respectively), Yum Brands (NYSE: YUM) (3%/11%), Restaurant Brands (2%/8%) (NYSE: QSR) and Starbucks (NASDAQ: SBUX) (<5% EMEA).

"While currency translation is likely going to be a headwind to earnings, we also wonder how much overall economic uncertainty might weigh on the consumer mindset in the near term," Palmer said.

The firm's favorite restaurant stocks remain Yum Brands, Starbucks and McDonald's.

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