Asia FX muted, dollar fragile as CPI data boosts Sept rate cut bets
Investing.com -- Investor sentiment in the restaurant sector is currently strongest for YUM! Brands and Shake Shack (NYSE:SHAK), according to the latest fieldwork and analysis from KeyBanc Capital Markets.
The firm said in a note Tuesday that it also sees improving sentiment around Chipotle (NYSE:CMG) and McDonald’s (NYSE:MCD), with expectations for better July performance following a softer second quarter.
“We believe investor sentiment skews most positively on YUM! Brands and Shake Shack,” KeyBanc wrote. “Investors seem to be warming up to Chipotle and McDonald’s more than they have in the past few months, as these two brands are expected to fare better in July than they did during the 2Q.”
In contrast, sentiment is said to remain weak for Starbucks (NASDAQ:SBUX), Wendy’s, and Sweetgreen. “All three have not demonstrated consistent sales trends in recent weeks and are likely to miss consensus expectations,” the analysts noted.
KeyBanc reiterated its Overweight ratings on both McDonald’s and Chipotle, acknowledging second-quarter same-store sales (SSS) may come in light but expressing confidence in a second-half recovery.
“We expect both to miss 2Q25 SSS growth forecasts, [but] we have reasons to believe SSS trends will improve in July and/or as the 3Q progresses,” the firm wrote.
KeyBanc maintained its $325 price target on McDonald’s and raised its target on Chipotle stock to $60 from $58, citing “a path to improving SSS trends in the second half.”
The firm also lifted its price target on Dine Brands to $30 from $26, pointing to “significant upside to consensus SSS growth forecasts for Applebee’s.” However, it cautioned that enthusiasm is “tempered by the earnings impact of Dine Brand’s recent securitization refi.”