Latest news with #JohnIvankoe
CNBC
2 days ago
- Business
- CNBC
JPMorgan upgrades this restaurant chain, seeing stronger global unit growth and cash flow
JPMorgan sees a rosy outlook ahead for Yum Brands . The bank upgraded shares of the Taco Bell, KFC and Pizza Hut owner to an overweight investment rating from neutral, but analyst John Ivankoe lowered his 12-month price target to $162 per share from $170. This revised forecast is still approximately 14% higher than where shares closed Tuesday. Yum has added more than 6% this year, outperforming a gain of less than 4% for the S & P 500. YUM YTD mountain YUM YTD chart Ivankoe cited several catalysts for the stock, including strong free cash flow generation, a lower valuation and sustained unit growth of 4% or above. The stock "is close to levels first hit in late 2021 and deserves a revisit in our opinion," the analyst wrote. Ivankoe said that newly-appointed Yum CEO Chris Turner, who takes over in October, is likely to continue focusing on technology in order to drive franchisee returns. Outside the U.S., sales remain strong at Yum's international locations. "Within the 4.2% global unit growth, China represents a still very high 8.8% annual growth as implied by [Yum China] while Pizza Hut ex-China is down 1% and KFC intl ex-China is up 4.5%," JPMorgan said. "We expect the high returning Taco Bell to grow 4% globally with 3% from the U.S."
Yahoo
22-03-2025
- Business
- Yahoo
Is Tariff An Issue For Restaurant Sector? J.P. Morgan Highlights Winners & Losers
Last week, J.P. Morgan analyst John Ivankoe hosted Bloomin' Brands Inc (NASDAQ:BLMN), CAVA Group Inc (NYSE:CAVA), Brinker International Inc (NYSE:EAT), and Sweetgreen Inc (NYSE:SG) at the J.P. Morgan Las Vegas forum. The analyst noted that the key takeaway from all four companies was the focus on doing 'fewer things better' and consistently reinvesting in customer and employee experiences. According to the analyst, stock volatility has created opportunities, with the current 10-year yield of 4.3% helping global QSR valuations, easing fears of a 5-6% yield. The analyst recommended adding fresh investments in Dutch Bros Inc (NYSE:BROS), Starbucks Corp (NASDAQ:SBUX), and CAVA. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share! Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share. While McDonald's Corp (NYSE:MCD) and Restaurant Brands International Inc (NYSE:QSR) are fairly valued, slower U.S. data and international growth may present better buying opportunities, per the analyst. Yum! Brands Inc (NYSE:YUM) exceeded expectations, benefiting from tech-fee recapture. Domino's Pizza Inc (NASDAQ:DPZ) is fairly valued due to high expectations. It remains uncertain if the Middle East conflict's impact will drive sustained sales growth or just a leveling out. The analyst upgraded the shares of CAVA to Overweight. CAVA has significant potential for expansion in the U.S., with impressive free cash flow generation and a strong pipeline of operational and brand initiatives to drive sales and profits. The analyst reiterated a Neutral rating on Chipotle Mexican Grill, Inc (NYSE:CMG) and EAT due to high valuations and peak comps, but remain cautiously optimistic and would consider adding on volatility. Overweight-rated SG and Krispy Kreme Inc (NASDAQ:DNUT) face sales and profit challenges, with SG offering near-term potential through seasonal menus and loyalty programs. Trending: How do billionaires pay less in income tax than you?. Following YUM's Taco Bell analyst day on March 4, which highlighted the 'Byte by YUM!' platform and improving KFC international trends, the analyst conducted a full model review and a valuation reset. Projections include Taco Bell U.S. growing to 9,000 units by 2030 and Taco Bell International expanding to 2,000 units. The analyst assumes KFC international (excluding China) will increase to 22,300 units, while KFC China will reach 19,400. Compared to previous expectations, only BROS, DPZ, and Taco Bell (YUM) are performing ahead, while high-growth brands like CAVA, SG, Chili's, and SBUX are on track. Larger QSR brands like MCD, BK (QSR), KFC/PH (YUM), and fast-casual chains such as CMG and Shake Shack Inc (NYSE:SHAK) are underperforming. Casual dining brands like Darden Restaurants Inc (NYSE:DRI) (Olive Garden), Texas Roadhouse Inc (NASDAQ:TXRH) (Roadhouse), and BLMN (Outback) are also tracking lower. The U.S. restaurant labor market remains stable, with open positions at 6.2% of total employment, close to the 20-year average of 4.4%. The quits rate stands at 3.8%, near the historical average of 4.0%. Consumer confidence has declined, with a focus on the 'expectations' component, as cautious consumers become more selective in discretionary QSR brands, like MCD and DPZ, report weaker performance among low-income consumers. In contrast, high-growth brands like CAVA are seeing strong growth in the lowest income quartiles, suggesting a shift toward QSR trade-ups and growing brand awareness. According to the analyst, sourcing talent and retention remain key to building strong brands and scaling operations, mainly during the rapid adoption of in/out-of-store tech. Total industry supply growth has remained surprisingly resilient, up 12% from third-quarter FY18 to third-quarter FY24 for a CAGR of ~2%, opined the analyst. So much attention is placed on future AI driven opportunities, but the reality is 40% of the industry sales are from the top 500 chains with a very large addressable market of another 60% are considered to be independents, the analyst noted. Tariffs are less of an issue for this sector than other industries but related inflation could impact several daily consumer staple commodities including avocados, seasonal produce/fruit and coffee, said the analyst. Read Next: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum. These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends Image via 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? This article Is Tariff An Issue For Restaurant Sector? J.P. Morgan Highlights Winners & Losers originally appeared on Sign in to access your portfolio
Yahoo
20-03-2025
- Business
- Yahoo
Is Tariff An Issue For Restaurant Sector? J.P. Morgan Highlights Winners & Losers
Last week, J.P. Morgan analyst John Ivankoe hosted Bloomin' Brands Inc (NASDAQ:BLMN), CAVA Group Inc (NYSE:CAVA), Brinker International Inc (NYSE:EAT), and Sweetgreen Inc (NYSE:SG) at the J.P. Morgan Las Vegas forum. The analyst noted that the key takeaway from all four companies was the focus on doing 'fewer things better' and consistently reinvesting in customer and employee experiences. According to the analyst, stock volatility has created opportunities, with the current 10-year yield of 4.3% helping global QSR valuations, easing fears of a 5-6% yield. The analyst recommended adding fresh investments in Dutch Bros Inc (NYSE:BROS), Starbucks Corp (NASDAQ:SBUX), and CAVA. While McDonald's Corp (NYSE:MCD) and Restaurant Brands International Inc (NYSE:QSR) are fairly valued, slower U.S. data and international growth may present better buying opportunities, per the analyst. Yum! Brands Inc (NYSE:YUM) exceeded expectations, benefiting from tech-fee recapture. Domino's Pizza Inc (NASDAQ:DPZ) is fairly valued due to high expectations. It remains uncertain if the Middle East conflict's impact will drive sustained sales growth or just a leveling out. Also Read: The analyst upgraded the shares of CAVA to Overweight. CAVA has significant potential for expansion in the U.S., with impressive free cash flow generation and a strong pipeline of operational and brand initiatives to drive sales and profits. The analyst reiterated a Neutral rating on Chipotle Mexican Grill, Inc (NYSE:CMG) and EAT due to high valuations and peak comps, but remain cautiously optimistic and would consider adding on volatility. Overweight-rated SG and Krispy Kreme Inc (NASDAQ:DNUT) face sales and profit challenges, with SG offering near-term potential through seasonal menus and loyalty programs. Following YUM's Taco Bell analyst day on March 4, which highlighted the 'Byte by YUM!' platform and improving KFC international trends, the analyst conducted a full model review and a valuation reset. Projections include Taco Bell U.S. growing to 9,000 units by 2030 and Taco Bell International expanding to 2,000 units. The analyst assumes KFC international (excluding China) will increase to 22,300 units, while KFC China will reach 19,400. Compared to previous expectations, only BROS, DPZ, and Taco Bell (YUM) are performing ahead, while high-growth brands like CAVA, SG, Chili's, and SBUX are on track. Larger QSR brands like MCD, BK (QSR), KFC/PH (YUM), and fast-casual chains such as CMG and Shake Shack Inc (NYSE:SHAK) are underperforming. Casual dining brands like Darden Restaurants Inc (NYSE:DRI) (Olive Garden), Texas Roadhouse Inc (NASDAQ:TXRH) (Roadhouse), and BLMN (Outback) are also tracking lower. The U.S. restaurant labor market remains stable, with open positions at 6.2% of total employment, close to the 20-year average of 4.4%. The quits rate stands at 3.8%, near the historical average of 4.0%. Consumer confidence has declined, with a focus on the 'expectations' component, as cautious consumers become more selective in discretionary spending. Large QSR brands, like MCD and DPZ, report weaker performance among low-income consumers. In contrast, high-growth brands like CAVA are seeing strong growth in the lowest income quartiles, suggesting a shift toward QSR trade-ups and growing brand awareness. According to the analyst, sourcing talent and retention remain key to building strong brands and scaling operations, mainly during the rapid adoption of in/out-of-store tech. Total industry supply growth has remained surprisingly resilient, up 12% from third-quarter FY18 to third-quarter FY24 for a CAGR of ~2%, opined the analyst. So much attention is placed on future AI driven opportunities, but the reality is 40% of the industry sales are from the top 500 chains with a very large addressable market of another 60% are considered to be independents, the analyst noted. Tariffs are less of an issue for this sector than other industries but related inflation could impact several daily consumer staple commodities including avocados, seasonal produce/fruit and coffee, said the analyst. Read Next:Image via Shutterstock. Date Firm Action From To Mar 2022 Northcoast Research Downgrades Buy Neutral Jan 2022 Barclays Maintains Overweight Jan 2022 Keybanc Maintains Overweight View More Analyst Ratings for MCD View the Latest Analyst Ratings 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? MCDONALD'S (MCD): Free Stock Analysis Report YUM BRANDS (YUM): Free Stock Analysis Report STARBUCKS (SBUX): Free Stock Analysis Report DOMINO'S PIZZA (DPZ): Free Stock Analysis Report DARDEN RESTAURANTS (DRI): Free Stock Analysis Report SHAKE SHACK (SHAK): Free Stock Analysis Report BLOOMIN BRANDS (BLMN): Free Stock Analysis Report This article Is Tariff An Issue For Restaurant Sector? J.P. Morgan Highlights Winners & Losers originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
