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The Zacks Analyst Blog Highlights McDonald's, Wingstop, Darden Restaurants and Domino's Pizza
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For Immediate Release
Chicago, IL – January 11, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald's Corp. (MCD - Free Report) , Wingstop Inc. (WING - Free Report) , Darden Restaurants, Inc. (DRI - Free Report) and Domino's Pizza, Inc. (DPZ - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
4 Solid Stocks to Buy on Soaring Restaurant Sales
Retail sales unexpectedly declined in November but restaurant sales saw an impressive jump as people continued to spend more at eateries. The Fed’s has interest rate hikes to fight soaring inflation impacted retail sales. However, people spent aggressively at bars and restaurants.
Although inflation is still at multi-year highs, prices have somewhat cooled lately, indicating that inflation has been slowing. This has also been helping sales at restaurants. Given this scenario, stocks like McDonald's Corp., Wingstop Inc., Darden Restaurants, Inc. and Domino's Pizza, Inc. are likely to benefit in the near term.
Restaurant Sales Growing
Sales at bars and restaurants in the United States increased 0.9% in November after jumping 1.6% in October. The figure is definitely impressive given that the growth in sales comes despite sky-high commodity prices.
High prices have been impacting retail sales, which declined sharply in November. Retail sales dropped 0.6%, more than double the expectations of a 0.3% drop and the steepest decline in the past five months. Retail sales did, however, increase 6.5% year over year in November.
Consumer spending has been constrained due to rising commodity prices, which is hurting the retail sector. The restaurant industry has nevertheless managed to put up a great performance, with revenues increasing practically every month.
People have been eating out more frequently ever since the COVID-induced lockdown ended and the economy reopened. Thus, it is hardly surprising that sales at pubs and restaurants have been steadily increasing.
The retail industry was one of the worst affected by the coronavirus pandemic in 2020, with restaurant sales taking a massive hit. After that, sales started to increase once again, but the recovery was unstable because COVID-related restrictions were still in place and millions of people were reluctant to interact confidently in social settings.
Things finally started changing in 2022 and the industry began to ostensibly show indications of revival. Sales have now returned to their pre-pandemic levels and are expected to increase going forward.
Still Challenges Aplenty
During normal times, customers typically spend more on services than on goods. Due to the lack of options, this altered during the epidemic, with people spending more on goods than services.
However, things are once again back to normal and people have started spending more on services. Restaurants are the only services category included in retail sales.
Rising prices though remain a concern. Restaurant owners are working extremely hard to overcome the challenges, especially rising costs. Restaurants are strongly focusing on digital innovation, trying to boost sales, and putting cost-cutting measures into place, which is aiding in the revival of the sector.
Digital innovation is now a crucial component in increasing sales because of the Internet's increasing significance. Delivery services and online platforms are commonly used by large restaurant chains, which has increased revenues.
Also, the restaurant industry has been adding a lot of jobs. In December, the leisure and hospitality sector added 67,000 jobs, according to the most recent Labor Department data.
Our Choices
Given this situation, it would be ideal to invest in these four restaurant stocks.
McDonald's Corp. is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. MCD mainly operates and franchises quick-service restaurants (QSRs) under the McDonald’s brand. Nearly 93% of McDonald’s Corporation’s restaurants worldwide are owned and operated by independent local businessmen as well as women.
McDonald's Corporation’s expected earnings growth rate for the current year is 7%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 90 days. MCD presently carries a Zacks Rank #2.
Wingstop Inc. franchises and operates restaurants. WING’s operating segment consists of the Franchise and Company segments. Wingstop offers cooked-to-order, hand-sauced and tossed chicken wings.
Wingstop’s expected earnings growth rate for the current year is 23%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 90 days. WING currently carries a Zacks Rank #2.
Darden Restaurants, Inc. is one of the largest casual dining restaurant operators worldwide. DRI has operations in the United States and Canada with more than 1,700 restaurants.
Darden Restaurants’ expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the past 90 days. DRI currently has a Zacks Rank #2.
Domino's Pizza, Inc., which delivers pizzas under the Domino’s Pizza brand, is a top player in the Quick-Service Restaurant or QSR Pizza category. Through its subsidiaries, DPZ operates as a pizza delivery company in the United States and internationally, with 18,800 locations in more than 90 markets.
Domino's Pizza’s expected earnings growth rate for next year is 17.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.3% over the past 60 days. DPZ currently has a Zacks Rank #2.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared+40.3%, +48.2%, +67.6%, +94.4%, and+95.3%. Today you can a
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights McDonald's, Wingstop, Darden Restaurants and Domino's Pizza
For Immediate Release
Chicago, IL – January 11, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald's Corp. (MCD - Free Report) , Wingstop Inc. (WING - Free Report) , Darden Restaurants, Inc. (DRI - Free Report) and Domino's Pizza, Inc. (DPZ - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
4 Solid Stocks to Buy on Soaring Restaurant Sales
Retail sales unexpectedly declined in November but restaurant sales saw an impressive jump as people continued to spend more at eateries. The Fed’s has interest rate hikes to fight soaring inflation impacted retail sales. However, people spent aggressively at bars and restaurants.
Although inflation is still at multi-year highs, prices have somewhat cooled lately, indicating that inflation has been slowing. This has also been helping sales at restaurants. Given this scenario, stocks like McDonald's Corp., Wingstop Inc., Darden Restaurants, Inc. and Domino's Pizza, Inc. are likely to benefit in the near term.
Restaurant Sales Growing
Sales at bars and restaurants in the United States increased 0.9% in November after jumping 1.6% in October. The figure is definitely impressive given that the growth in sales comes despite sky-high commodity prices.
High prices have been impacting retail sales, which declined sharply in November. Retail sales dropped 0.6%, more than double the expectations of a 0.3% drop and the steepest decline in the past five months. Retail sales did, however, increase 6.5% year over year in November.
Consumer spending has been constrained due to rising commodity prices, which is hurting the retail sector. The restaurant industry has nevertheless managed to put up a great performance, with revenues increasing practically every month.
People have been eating out more frequently ever since the COVID-induced lockdown ended and the economy reopened. Thus, it is hardly surprising that sales at pubs and restaurants have been steadily increasing.
The retail industry was one of the worst affected by the coronavirus pandemic in 2020, with restaurant sales taking a massive hit. After that, sales started to increase once again, but the recovery was unstable because COVID-related restrictions were still in place and millions of people were reluctant to interact confidently in social settings.
Things finally started changing in 2022 and the industry began to ostensibly show indications of revival. Sales have now returned to their pre-pandemic levels and are expected to increase going forward.
Still Challenges Aplenty
During normal times, customers typically spend more on services than on goods. Due to the lack of options, this altered during the epidemic, with people spending more on goods than services.
However, things are once again back to normal and people have started spending more on services. Restaurants are the only services category included in retail sales.
Rising prices though remain a concern. Restaurant owners are working extremely hard to overcome the challenges, especially rising costs. Restaurants are strongly focusing on digital innovation, trying to boost sales, and putting cost-cutting measures into place, which is aiding in the revival of the sector.
Digital innovation is now a crucial component in increasing sales because of the Internet's increasing significance. Delivery services and online platforms are commonly used by large restaurant chains, which has increased revenues.
Also, the restaurant industry has been adding a lot of jobs. In December, the leisure and hospitality sector added 67,000 jobs, according to the most recent Labor Department data.
Our Choices
Given this situation, it would be ideal to invest in these four restaurant stocks.
McDonald's Corp. is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. MCD mainly operates and franchises quick-service restaurants (QSRs) under the McDonald’s brand. Nearly 93% of McDonald’s Corporation’s restaurants worldwide are owned and operated by independent local businessmen as well as women.
McDonald's Corporation’s expected earnings growth rate for the current year is 7%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 90 days. MCD presently carries a Zacks Rank #2.
Wingstop Inc. franchises and operates restaurants. WING’s operating segment consists of the Franchise and Company segments. Wingstop offers cooked-to-order, hand-sauced and tossed chicken wings.
Wingstop’s expected earnings growth rate for the current year is 23%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 90 days. WING currently carries a Zacks Rank #2.
Darden Restaurants, Inc. is one of the largest casual dining restaurant operators worldwide. DRI has operations in the United States and Canada with more than 1,700 restaurants.
Darden Restaurants’ expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the past 90 days. DRI currently has a Zacks Rank #2.
Domino's Pizza, Inc., which delivers pizzas under the Domino’s Pizza brand, is a top player in the Quick-Service Restaurant or QSR Pizza category. Through its subsidiaries, DPZ operates as a pizza delivery company in the United States and internationally, with 18,800 locations in more than 90 markets.
Domino's Pizza’s expected earnings growth rate for next year is 17.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.3% over the past 60 days. DPZ currently has a Zacks Rank #2.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared+40.3%, +48.2%, +67.6%, +94.4%, and+95.3%. Today you can a
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.