ARCO - Restaurant check: Chipotle Dutch Bros Sweetgreen are the favorites at Cowen

Cowen named its favorite restaurants stocks after taking a deep dive into the sector. The firm warned that even with improved labor developments, input costs will be broadly challenged by surging oil prices as soft commodity prices typically follow oil. A side effect of higher gas prices is that consumers' disposable income also take a hit. Higher freight and labor costs are also a margin headwind. "With commodity prices unlikely to abate for the foreseeable future, and the industry already running 6.8% price, the highest level of price in the last 40 years, our previous thought around a 2H weighted year for the group is increasingly pushed out to 2023," noted analyst Andrew Charles. Charles and team think the way for investors to play the restaurant sector is to focus on chains that have medium-term focused margin stories that resonate with investors. This includes Chipotle's (NYSE:CMG) target for +27%+ margins

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Restaurant check: Chipotle, Dutch Bros, Sweetgreen are the favorites at Cowen