U.S. Markets close in 24 mins

The Zacks Analyst Blog Highlights: Chipotle Mexican Grill, Restaurant Brands International, Dunkin' Brands, Wingstop and Shake Shack

Zacks Equity Research

For Immediate Release

Chicago, IL –October 25, 2019 – 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: Chipotle Mexican Grill CMG, Restaurant Brands International Inc. QSR, Dunkin' Brands Group, Inc. DNKN, Wingstop Inc. WING and Shake Shack Inc. SHAK.

Here are highlights from Thursday’s Analyst Blog:

Chipotle Too Expensive? 5 Low-Cost Restaurants to Buy

Chipotle Mexican Grill, Inc. reported impressive third-quarter 2019 results earlier this week, with both earnings and revenues soaring above the Zacks Consensus Estimate. However, such promising results have made the company’s shares too pricey for small investors.

In such a scenario, we have highlighted restaurant stocks that are quite affordable and have significant room for further growth.

Stellar Q3 Earnings for Chipotle

Chipotle’s third-quarter adjusted earnings of $3.82 per share beat the Zacks Consensus Estimate of $3.20. The company’s net income was reported at $98.6 million, up from $38.2 million in Q3 2018. Its revenues of $1.4 billion also outpaced the Zacks Consensus Estimate by 1.8% and advanced 14.6% year over year.

In fact, the company’s revenue growth in Q3 was a result of its increased attention to enhance customer experience by introducing food-safety programs, sales-building initiatives and superior digital innovation. (Read more)

Specifically in the quarter ended September 2019, comparable-store sales of Chipotle grew 11% compared with Q3 2018. A major factor behind the sales boost is the company’s offering of innovative new products, which successfully attracted customers’ attention. For example, Chipotle temporarily offered carne asada this year, which gave its sales a huge boost.

Second, the company has taken an initiative to make its drive-throughs digital, calling the concept “Chipotlane.” This new mode of digital-only drive-through could be a turning point for the company as well.

Given such impressive third-quarter earnings and revenues of Chipotle, it wouldn’t be a surprise if the company’s shares climb up ahead. In fact, the restaurant chain’s stock price closed at $788.19 on Oct 23. Besides, the restaurant chain also has a P/E of 61.50, which is much higher than the industry average of 20.00. (Read more: P/E Ratio: What Is It?)

4 Restaurant Stocks to Buy

Chipotle may have been a target for investors recently but not everyone can afford such a pricey stock. Therefore one can turn to other restaurant stocks, which have equally good potential for growth and have earned positive Zacks Earnings ESP (Expected Surprise Prediction).

In addition, these four stocks carry a Zacks Rank #2 and won’t burn a hole in investors’ pockets by virtue of their low-cost stock prices. You can see the complete list of today’s Zacks #1 Rank stocks here.

Restaurant Brands International Inc. is the operator of quick service restaurants under brand names of Tim Hortons (TH), Burger King (BK) and Popeyes (PLK). The stock currently has an Earnings ESP of +0.15%.

Second, the Zacks Consensus Estimate for Restaurant Brands International’s third-quarter earnings is $0.72 per share, which suggests year-over-year growth of +14.3%. The Zacks Consensus Estimate for revenues is $1.46 billion, indicating a rise of 6.3% from Q3 2018. (Read more)

Finally, Restaurant Brands International’s closing price on Oct 23 was $67.90.

Dunkin' Brands Group, Inc. is the owner and operator of quick service restaurants globally. Some of the company’s segments include Baskin-Robbins International, Dunkin' U.S. and Dunkin' International. The stock currently has an Earnings ESP of +2.15%.

In addition, Dunkin' Brands has partnered with Beyond Meat to launch the Beyond Sausage Sandwich. The new product will be available from Nov 6 in more than 9,000 Dunkin' restaurants across the United States. This is bound to push sales higher.

Dunkin’ Brands also launched the Dunkin’ Bowls in April, which consists of an egg white bowl of 14 grams of protein and is only 250 calories. The company’s innovative products and strong brand presence are extremely innovative. Finally, Dunkin' Brands’ closing price on Oct 23 was $74.68.

Wingstop Inc. is an operator of restaurants under the brand name Wingstop. The restaurants offer cooked-to-order, hand-sauced and tossed chicken wings. Wingstop is expected to report its Q3 earnings on Oct 30. The stock currently has an Earnings ESP of +5.62%. Second, the Zacks Consensus Estimate for the restaurant chain’s Q3 revenues is $49.52 million, indicating a rise of 29.5% from third-quarter 2018. (Read more)

Finally, Wingstop’s closing price on Oct 23 was $84.32.

Shake Shack Inc. is the operator of Shake Shack restaurants in the United States and globally. The restaurant offers hamburgers, crinkle cut fries, hot dogs, chicken, shakes, beer, wine and frozen custard etc. Shake Shack is expected to report third-quarter earnings results on Nov 4. The stock currently has an Earnings ESP of +2.27%. Shake Shack’s closing price on Oct 23 was $84.53.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                   

https://www.zacks.com                                                 

 

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/performancefor information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Dunkin' Brands Group, Inc. (DNKN) : Free Stock Analysis Report
 
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
 
Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report
 
Shake Shack, Inc. (SHAK) : Free Stock Analysis Report
 
Wingstop Inc. (WING) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research