Domino's Pizza, Restaurant Brands, Sweetgreen In This Analyst's 2024 Top Picks: What's Cooking In For Other Restaurant Companies?
Portfolio Pulse from Shivani Kumaresan
Oppenheimer analyst Brian Bittner has provided his top picks for 2024 in the quick service restaurant sector, upgrading Yum! Brands (YUM) to Outperform with a $154 price target (PT) and highlighting its digital sales growth and diversified business model. McDonald's (MCD) was downgraded to Perform due to a lack of identifiable catalysts for 2024. Papa John's (PZZA) was also downgraded to Perform, with the analyst expecting lower FY24 EPS than consensus. Domino's Pizza (DPZ) is a top pick with an Outperform rating and a $470 PT, expected to outperform due to a revival story and new partnerships. Restaurant Brands International (QSR) maintains an Outperform rating and an $89 PT, with anticipated EPS growth. Sweetgreen (SG) is rated Outperform with a $15 PT, as the analyst sees a transition to sustainable EBITDA profitability starting in 2024.
January 05, 2024 | 6:25 pm
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POSITIVE IMPACT
Domino's Pizza rated Outperform with a $470 price target, expected to outperform due to a revival story and new loyalty and third-party partnerships.
The Outperform rating and $470 price target for DPZ indicate a strong positive short-term outlook, with expected stock outperformance based on a revival story and the introduction of new loyalty programs and partnerships.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 95
POSITIVE IMPACT
Restaurant Brands International maintains an Outperform rating and an $89 price target, with expected EPS growth and above-average SSS momentum.
The continued Outperform rating and $89 price target for QSR suggest a positive short-term outlook, supported by expected EPS growth and sustained sales momentum.
CONFIDENCE 80
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Sweetgreen rated Outperform with a $15 price target, as the analyst sees a transition to sustainable EBITDA profitability starting in 2024.
The Outperform rating and $15 price target for SG indicate a positive short-term outlook, with the company expected to transition to sustainable EBITDA profitability starting in 2024.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Yum! Brands upgraded to Outperform with a $154 price target due to diversified business model, digital sales growth, and high-quality unit growth.
The upgrade to Outperform and the establishment of a $154 price target suggest a positive outlook for YUM's stock price in the short term, driven by its diversified business model and digital sales growth.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
McDonald's downgraded to Perform from Outperform due to lack of catalysts for 2024, despite strong FY23 growth expectations.
The downgrade to Perform indicates a neutral to negative short-term outlook for MCD's stock price, as the analyst does not foresee additional catalysts that could drive consensus earnings forecasts or valuation multiple.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85
NEGATIVE IMPACT
Papa John's downgraded to Perform with the previous $85 price target removed, due to lower FY24 EPS expectations and dilution from UK store acquisitions.
The downgrade to Perform and removal of the previous price target suggest a cautious short-term outlook for PZZA's stock price, influenced by lower expected EPS and the dilutive effect of UK store acquisitions.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80