Stocks of two fast-food restaurant chains are up so far in Friday morning trading after a Stifel analyst upgraded their ratings from neutral to buy. Yum! Brands (NYSE: YUM), parent of Pizza Hut, Taco Bell, KFC, and other popular brands, and Restaurant Brands International (NYSE: QSR), or RBI, parent of Popeyes, Burger King, and Tim Hortons, were both recognized by analyst Chris O'Cull based on several factors.
The Stifel Financial Corp. analyst said in a research note the companies' business models already prepared them for the COVID-19 pandemic. The note pointed out, "Fast food restaurants were built for off-premise usage, with 70%+ of sales coming from drive-thrus." This matches up with Yum!'s takeout advantage, possibly giving it more resilience in April than restaurants heavily dependent on dine-in such as The Cheesecake Factory (NASDAQ: CAKE) and Cracker Barrel (NASDAQ: CBRL).
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