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Business Insider
2 days ago
- Business
- Business Insider
MCD vs. TXRH vs. CAVA: Which Restaurant Stock Has the Highest Upside Potential?
Macro uncertainties and tariff-led pressure on costs are expected to continue to weigh on the performance of restaurant chains. While ongoing headwinds could impact restaurant stocks over the near term, analysts remain optimistic about the long-term growth prospects of several restaurant stocks. Using TipRanks' Stock Comparison Tool, we placed McDonald's (MCD), Texas Roadhouse (TXRH), and CAVA Group (CAVA) against each other to find the restaurant stock that has the highest upside potential, according to Wall Street. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. McDonald's (NYSE:MCD) Stock McDonald's stock has risen about 15% over the past year, but is essentially flat on a year-to-date basis. The fast-food chain reported mixed results for the first quarter of 2025, largely due to a challenging macroeconomic backdrop. In fact, U.S. same-store sales fell for the second straight quarter, posting the largest decline (down 3.6% in Q1 2025) since the onset of the COVID-19 pandemic. Unfavorable weather and cautious consumer spending impacted McDonald's sales in the first quarter. Nonetheless, McDonald's reaffirmed its full-year guidance, reflecting resilience in a tough backdrop. The company stated that it is working on improving its performance by focusing on value meals, menu innovation, and product launches such as McCrispy Chicken Strips and the reintroduction of snack wraps. Is McDonald's Stock a Buy, Sell, or Hold? Last week, UBS analyst Dennis Geiger reiterated a Buy rating on McDonald's stock with a price target of $350. The 4-star analyst believes that the pullback in the stock, combined with encouraging U.S. sales in the second half of 2025, makes MCD an attractive pick. The analyst sees a 'reasonably limited' downside in MCD stock, as he believes that it is a quality business positioned for multi-year market share gains. While Geiger agreed that consumer defensives are out of favor and quick service restaurant (QSR) sales trends and stocks continue to be under pressure, he expects to see share gains as U.S. and International trends improve. He added that McDonald's appears well-positioned to deliver strong same-store sales in the second half of 2025, driven by new products, value initiatives, and marketing plans, even as lower and middle-income spending pressure could persist. Currently, Wall Street has a Moderate Buy consensus rating on McDonald's stock based on 12 Buys, 13 Holds, and one Sell recommendation. The average MCD stock price target of $329.42 indicates about 13% upside potential. See more MCD analyst ratings Texas Roadhouse (NASDAQ:TXRH) Stock Texas Roadhouse is a casual dining steakhouse chain. The company missed analysts' earnings expectations for the first quarter of Fiscal 2025, as restaurant margins contracted due to commodity inflation and increased wages and other labor expenses. TXRH's comparable restaurant sales increased by 3.5% in Q1 2025. The company indicated that trends were improving, with comparable restaurant sales rising 5% in the first five weeks of Q2 FY25. Additionally, Texas Roadhouse increased its menu prices by about 1.4% in early April. Is TXRH a Good Stock to Buy? Recently, Texas Roadhouse announced the departure of CFO Chris Monroe from the company and the appointment of Vice President of Finance Keith Humpich as the interim CFO. Reacting to the news, Stephens analyst Jim Salera stated that the interim CFO appointment adds stability following Monroe's departure, given Humpich's long tenure and familiarity with the company's financial operations. Salera added that Texas Roadhouse continues to outperform casual dining rivals, with April traffic accelerating exiting Q1 2025. The analyst believes that the company's consistent execution, guest focus, and 'scratch-made' menu continue to be key differentiators in an uncertain consumer backdrop. However, Salera maintained a Hold rating on TXRH stock with a price target of $170, citing concerns related to macro uncertainty in the second half of 2025 and a premium valuation. Overall, Texas Roadhouse stock scores a Moderate Buy consensus rating based on seven Buys and nine Holds. The average TXRH stock price target of $190.87 indicates a modest upside potential of about 2% from current levels. TXRH stock has risen 9% over the past year. Cava Group (NYSE:CAVA) Stock Mediterranean fast casual restaurant chain Cava Group delivered better-than-expected earnings for the first quarter of 2025, with revenue growing 28% to $332 million. The company's same-store sales increased by 10.8%, outperforming several peers in the industry. Despite the strong results, CAVA stock has declined 25% year-to-date and 9% over the past year owing to concerns over valuation and macro uncertainties. Looking ahead, management aims to capitalize on ample opportunities to expand. The company expects to open 64 to 68 new restaurants this year, a slight increase from the previous forecast of 62 to 66 stores. Cava Group operated 382 restaurants as of the end of Q1 2025 and aims to increase its footprint to at least 1,000 restaurants by 2032. Is CAVA Stock a Buy? Recently, Stifel analyst Chris O'Cull reiterated a Buy rating on Cava Group stock but lowered the price target to $125 from $175. The 5-star analyst sees the pullback in the stock as a buying opportunity. Despite near-term challenges, the analyst believes that McDonald's long-term outlook is intact, supported by unit expansion, increasing brand awareness, and improving average unit volumes. He expects McDonald's long-term revenue growth in the 17% to 20% range, driven by a 15% unit growth and mid-single-digit same-restaurant sales (SRS) gains. O'Cull acknowledged near-term softness in CAVA's SRS growth, particularly in the second quarter, due to tough comparisons with the prior-year quarter, which included the launch of the popular Grilled Steak. The analyst now expects Q2 SRS of 5.5%, below the Street's estimate of 6.9%. That said, he noted the strength in CAVA's fundamentals, calling the dip in the stock 'a dish worth grabbing.' O'Cull expects Cava Group's average unit volumes (AUVs) to grow faster than previously expected, fueled by brand expansion and improved performance at new locations. He expects the company's EBIT margin to improve to the range of 9% to 10% by 2030 from an estimated 4.8% in Fiscal 2025, driven by scale efficiencies. CAVA stock price target of $112.92 indicates 34% upside potential. Conclusion Currently, Wall Street is cautiously optimistic about all three restaurant stocks discussed above. Currently, they see higher upside potential in CAVA stock than in MCD and TXRH stocks. Analysts view the pullback in CAVA stock as an attractive buying opportunity to build a position and gain from the company's long-term growth potential.
Yahoo
29-04-2025
- Business
- Yahoo
How To Earn $500 A Month From Starbucks Stock Ahead Of Q2 Earnings
Starbucks Corporation (NASDAQ:SBUX) will release earnings results for the second quarter, after the closing bell on Tuesday, April 29. Analysts expect the Seattle-based company to report quarterly earnings at 48 cents per share. That's down from 68 cents per share in the year-ago period. Starbucks projects to report quarterly revenue at $8.83 billion, compared to $8.56 billion a year earlier. On Monday, UBS analyst Dennis Geiger maintained Starbucks with a Neutral rating and lowered the price target from $105 to $90. With the recent buzz around Starbucks, some investors may be eyeing potential gains from the company's dividends. Currently, Starbucks offers an annual dividend yield of 2.91% — a quarterly dividend of 61 cents per share ($2.44 a year). So, how can investors exploit its dividend yield to pocket a regular $500 monthly? To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $206,310 or around 2,459 shares. For a more modest $100 per month or $1,200 per year, you would need $41,279 or around 492 shares. To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.44 in this case). So, $6,000 / $2.44 = 2,459 ($500 per month), and $1,200 / $2.44 = 492 shares ($100 per month). View more earnings on SBUX Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time. How that works: The dividend yield is computed by dividing the annual dividend payment by the stock's current price. For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40). Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield. SBUX Price Action: Shares of Starbucks gained 0.1% to close at $83.90 on More: Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? STARBUCKS (SBUX): Free Stock Analysis Report This article How To Earn $500 A Month From Starbucks Stock Ahead Of Q2 Earnings originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
17-04-2025
- Business
- Yahoo
Why Dine Brands Global, Inc. (DIN) is Among the Top Restaurant Stocks to Buy Under $20
We recently published a list of . In this article, we are going to take a look at where Dine Brands Global, Inc. (NYSE:DIN) stands against other top restaurant stocks to buy under $20. Restaurant stocks are showing volatility amid Trump's tariff impositions across various sectors. On April 7, CNBC reported that while US stocks are tumbling due to the effects of high tariffs on the import of goods from key trading partners, analysts do not anticipate the tariffs to hit most restaurant stocks directly. However, inflation is expected to follow behind, fueled by expert and investor fear of an impending recession. This may put pressure on the spending capacity of consumers, resulting in an economic downturn. CNBC reported that UBS analyst Dennis Geiger said the following in a note to clients: 'We view the direct cost impact of tariffs on restaurants as manageable, with a focus on select commodity costs, but see the bigger risk as incremental pressure on consumer spending and industry demand.' CNBC also reported that investor concerns affected restaurant stocks across all sectors. Fast food restaurant chains have historically shown the most resilience during recessions, as consumers looking for cheap dining options typically level down from fast-casual or full-service diners and eateries to fast food options. However, the drop in consumer spending witnessed last year saw fast food restaurants hit hard, as low-income consumers cut their spending to this sector, visiting them less frequently. High-income consumers, on the other hand, continued with their usual dining habits, creating a gap that negatively affected fast food companies. Quick-service restaurants thus underwent same-store sales declines. On March 8, Mario Carbone, Major Food Group chef and co-founder, appeared on CNBC's 'Power Lunch' to discuss the effects of Trump's tariffs on the food industry and how high-end consumers are behaving in the sector. Talking about New York, he said that the numbers are booming, going above their pre-Covid benchmarks. New York is thus telling us that everything is good, and there is no fear right now in dining in the luxury sector. Stats are up, and restaurants are packed, with consumer energy through the roof. As of right now, there are no signs of slowing at all if one evaluates the spending and trends in restaurant reports. However, Carbone said that inflation hits the food and restaurant industry just like everyone else. The luxury food sector is responsible to the customer for bringing in the best ingredients for every meal, which is why it has no choice but to pass the effects on to the consumer in case such trends materialize. We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 restaurant stocks under $20 as of April 13, 2025, and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A family enjoying their meal at a restaurant from the company's franchise operations. Share Price: $19.68 Number of Hedge Fund Holders: 29 Dine Brands Global, Inc. (NYSE:DIN) owns and franchises casual and family dining restaurants, including Applebee's and IHOP. Its operations are divided into Franchise, Rental, Company Restaurant, and Financing Operations segments. The company generated $106.4 million in adjusted free cash flow in fiscal year 2024, reflecting a $103.3 million growth over last year. The steady state of its cash flow shows the financial stability and resilience of Dine Brands Global, Inc.'s (NYSE:DIN) platforms through market cycles. This positions the company to make the necessary investments for improved performance. In 2025, the company is focusing on opportunities to leverage its strong free cash flow, scale, and expertise to improve brand performance. Dine Brands Global, Inc. (NYSE:DIN) is doing so by improving guest experience through menu enhancements and improved operations, along with dynamic marketing initiatives. Analysts are bullish on the stock, and its median price target of $19.68 implies an upside of 34.65% from current levels. Overall, DIN ranks 3rd on our list of the top restaurant stocks to buy under $20. While we acknowledge the potential for DIN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DIN but trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. 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Yahoo
17-04-2025
- Business
- Yahoo
Is Cannae Holdings, Inc. (CNNE) the Top Restaurant Stock to Buy Under $20?
We recently published a list of . In this article, we are going to take a look at where Cannae Holdings, Inc. (NYSE:CNNE) stands against other top restaurant stocks to buy under $20. Restaurant stocks are showing volatility amid Trump's tariff impositions across various sectors. On April 7, CNBC reported that while US stocks are tumbling due to the effects of high tariffs on the import of goods from key trading partners, analysts do not anticipate the tariffs to hit most restaurant stocks directly. However, inflation is expected to follow behind, fueled by expert and investor fear of an impending recession. This may put pressure on the spending capacity of consumers, resulting in an economic downturn. CNBC reported that UBS analyst Dennis Geiger said the following in a note to clients: 'We view the direct cost impact of tariffs on restaurants as manageable, with a focus on select commodity costs, but see the bigger risk as incremental pressure on consumer spending and industry demand.' CNBC also reported that investor concerns affected restaurant stocks across all sectors. Fast food restaurant chains have historically shown the most resilience during recessions, as consumers looking for cheap dining options typically level down from fast-casual or full-service diners and eateries to fast food options. However, the drop in consumer spending witnessed last year saw fast food restaurants hit hard, as low-income consumers cut their spending to this sector, visiting them less frequently. High-income consumers, on the other hand, continued with their usual dining habits, creating a gap that negatively affected fast food companies. Quick-service restaurants thus underwent same-store sales declines. On March 8, Mario Carbone, Major Food Group chef and co-founder, appeared on CNBC's 'Power Lunch' to discuss the effects of Trump's tariffs on the food industry and how high-end consumers are behaving in the sector. Talking about New York, he said that the numbers are booming, going above their pre-Covid benchmarks. New York is thus telling us that everything is good, and there is no fear right now in dining in the luxury sector. Stats are up, and restaurants are packed, with consumer energy through the roof. As of right now, there are no signs of slowing at all if one evaluates the spending and trends in restaurant reports. However, Carbone said that inflation hits the food and restaurant industry just like everyone else. The luxury food sector is responsible to the customer for bringing in the best ingredients for every meal, which is why it has no choice but to pass the effects on to the consumer in case such trends materialize. We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 restaurant stocks under $20 as of April 13, 2025, and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A financial analyst at a trading desk, monitoring large scale investments in real-time. Share Price: $16.99 Number of Hedge Fund Holders: 29 Cannae Holdings, Inc. (NYSE:CNNE) manages and operates a group of companies and investments. Its operations are divided into Restuarant Group, Dun & Bradstreet, Alight, Black Knight Football and Entertainment, Corporate, and Other. Its Restaurant Group manages the operations of O'Charley's, 99 Restaurants, Legendary Baking Holdings I LLC, and VIBSQ Holdco LLC. The company has undertaken various initiatives that reflect the strength of its operations. These include a Dutch tender auction where Cannae Holdings, Inc. (NYSE:CNNE) repurchased over $200 million of its shares, acquisition of a majority stake in the Watkins Company, initiation of a regular quarterly dividend, and consistent cash flow generation. It is also focusing on its portfolio companies to improve their values and raised $470 million of cash from portfolio company sales in the year to fund share repurchases and new investments to continually rebalance its portfolio. In a report released on February 25, Ian Zaffino from Oppenheimer maintained a Buy rating on Cannae Holdings, Inc. (NYSE:CNNE) and set a price target of $27.00. Overall, CNNE ranks 2nd on our list of the top restaurant stocks to buy under $20. While we acknowledge the potential for CNNE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CNNE but trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
17-04-2025
- Business
- Yahoo
Is Denny's Corporation (DENN) Among the Top Restaurant Stocks to Buy Under $20?
We recently published a list of . In this article, we are going to take a look at where Denny's Corporation (NASDAQ:DENN) stands against other top restaurant stocks to buy under $20. Restaurant stocks are showing volatility amid Trump's tariff impositions across various sectors. On April 7, CNBC reported that while US stocks are tumbling due to the effects of high tariffs on the import of goods from key trading partners, analysts do not anticipate the tariffs to hit most restaurant stocks directly. However, inflation is expected to follow behind, fueled by expert and investor fear of an impending recession. This may put pressure on the spending capacity of consumers, resulting in an economic downturn. CNBC reported that UBS analyst Dennis Geiger said the following in a note to clients: 'We view the direct cost impact of tariffs on restaurants as manageable, with a focus on select commodity costs, but see the bigger risk as incremental pressure on consumer spending and industry demand.' CNBC also reported that investor concerns affected restaurant stocks across all sectors. Fast food restaurant chains have historically shown the most resilience during recessions, as consumers looking for cheap dining options typically level down from fast-casual or full-service diners and eateries to fast food options. However, the drop in consumer spending witnessed last year saw fast food restaurants hit hard, as low-income consumers cut their spending to this sector, visiting them less frequently. High-income consumers, on the other hand, continued with their usual dining habits, creating a gap that negatively affected fast food companies. Quick-service restaurants thus underwent same-store sales declines. On March 8, Mario Carbone, Major Food Group chef and co-founder, appeared on CNBC's 'Power Lunch' to discuss the effects of Trump's tariffs on the food industry and how high-end consumers are behaving in the sector. Talking about New York, he said that the numbers are booming, going above their pre-Covid benchmarks. New York is thus telling us that everything is good, and there is no fear right now in dining in the luxury sector. Stats are up, and restaurants are packed, with consumer energy through the roof. As of right now, there are no signs of slowing at all if one evaluates the spending and trends in restaurant reports. However, Carbone said that inflation hits the food and restaurant industry just like everyone else. The luxury food sector is responsible to the customer for bringing in the best ingredients for every meal, which is why it has no choice but to pass the effects on to the consumer in case such trends materialize. We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 restaurant stocks under $20 as of April 13, 2025, and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey's database. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A close-up of a table of people enjoying their meal and conversing in a Denny's restaurant. Share Price: $2.99 Number of Hedge Fund Holders: 16 Denny's Corporation (NASDAQ:DENN) operates franchised and licensed restaurants. Its operations are divided into Denny's and Other segments. The Denny's segment manages all company-franchised and licensed Denny's restaurants, while the Other segment covers all company and franchise restaurants. Fiscal Q4 2024 was a strong quarter for the company's brands, Denny's and Keke's. Denny's maintained positive quarter-over-quarter same-restaurant sales of 1.1%, while Keke's generated the same of positive 3%. Denny's also reported domestic systemwide, same-restaurant sales of positive 1.1% for fiscal Q4 2024, outperforming the BI Family Dining Index for the fourth consecutive quarter. Its domestic franchise restaurants delivered same-restaurant sales of 1.2%. Denny's Corporation (NASDAQ:DENN) also has strong off-premises sales, reaching 21% in fiscal Q4 2024. This was supported by a 70 basis point increase in same-restaurant sales from the launch of its third virtual brand, Banda Burrito. Analysts are bullish on the stock, and its median price target of $2.99 implies an upside of 167.56% from current levels. Overall, DENN ranks 8th on our list of the top restaurant stocks to buy under $20. While we acknowledge the potential for DENN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DENN but trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
