WEN - JPMorgan calls for more casual dining exposure add McDonald's and cut Shake Shack
Investors should add to their exposure to casual dining stocks as "some of the long-term structural margin gains and independent to chain share shifts may be overstated by investors" in the sector, JPMorgan says.Restaurant spending is improving to -20% Y/Y in H1 January from -27% in December, according to JPMorgan's data.Analyst John Ivankoe recommends adding Bloomin' Brands ([[BLMN]], +3%) and Darden ([[DRI]], -0.6%) and moving to Neutral on Cheesecake Factory ([[CAKE]], +10.5%) and Underweight on Texas Roadhouse ([[TXRH]], -3%).Among fast food, investors should add to McDonald's ([[MCD]], -0.8%) and Wendy's ([[WEN]], -0.3%), selling some Shake Shack ([[SHAK]], +4%) and Starbucks ([[SBUX]], -0.8%) to fund, he adds.JPMorgan also recommends taking profits on food distributors Sysco ([[SYY]], -3.2%) and U.S. Food Holdings ([[USFD]], -4.6%) as "highly profitable independent and business oriented hospitality sectors will see be lingering impact."Restaurants stocks are facing another headwind with the Biden administrations plans for a higher minimum wage.
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JPMorgan calls for more casual dining exposure, add McDonald's and cut Shake Shack