By Dhirendra Tripathi
Dave & Buster rose 6% and Cheesecake was up 5%.
The other restaurants figuring in Jefferies’ list are BJ's (NASDAQ: BJRI ), Chuy's (NASDAQ: CHUY ) and Red Robin Gourmet (NASDAQ: RRGB ). Each of the first two traded around 7% higher while Red Robin was up short of 2%.
Analyst Andy Barish sees Dave & Buster’s at $56, 33% higher than the stock’s current level. He sees 21% appreciation in Cheesecake to $60. BJ’s and Chuy’s will have to rise by 22% each from their current prices to hit Barish’s target of $55 and $41 for the two stocks, respectively. The analyst sees Red Robin at $31, a rise of 27% from the current level.
As per Jefferies’ research, weekly same-store sales and foot traffic data and company reports show signs of resiliency and less of a slowdown than what investors might have expected.
Barish cited multiple factors for his optimism in the five restaurant stocks, StreetInsider said, including multi-year market share growth opportunity for casual dining chains and a permanent increase in sales for off-premise-consumption. Sustainable operational efficiencies, pricing flexibility and higher volumes will also help margins, as per the report.
Barish also believes the current valuations are too hard to ignore.
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