RRGB - Wells Fargo lists Cracker Barrel Red Robin and Dave & Buster's as restaurant names to avoid in 2021

Wells Fargo turns cautious on three restaurant stocks as part of its deep dive into the sector. Cracker Barrel Old Country Store (CBRL), Red Robin Gourmet Burgers (RRGB) and Dave & Buster's Entertainment (PLAY) all both dropped by the firm to a rating of Underweight from Equal Weight. On Cracker Barrel: "We believe CBRL's business will take a greater hit than casual dining peers from COVID-19 given the over-exposure to breakfast, an older customer base and limited small-order off-premise business pre-crisis. Further, we see the company’s move into alcohol at its core brand as accretive to margins/profits over the long-term, but we expect this will take time to resonate with younger customers and not be enough of a NT positive to SSS/margins to match Street expectations (we are ~700bps below Street SSS expectations in FY21). Liquidity concerns are low given the company's real estate ownership and low relative leverage, but

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Wells Fargo lists Cracker Barrel, Red Robin and Dave & Buster's as restaurant names to avoid in 2021