In this article, we discuss the 3 restaurant stocks to watch amid tightening spending. If you want to read about some more restaurant stocks to watch amid tightening spending, go directly to 6 Restaurant Stocks to Watch Amid “Tightening Spending”.
3. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY)
Number of Hedge Fund Holders: 31
Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) owns and runs entertainment and dining venues. In late July, the company announced that it had closed the acquisition of Main Event from Ardent Leisure Group Limited. Back in early April, the former had purchased the latter in a deal worth $835 million. The firm expects accelerated, profitable growth under the deal and believes it will unlock additional value for its shareholders. Main Event is a family entertainment firm with 50 stores in the US.
On July 13, Truist analyst Jake Bartlett maintained a Buy rating on Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) stock and lowered the price target to $57 from $67, noting that the firm had put out worse-than-expected near-term sales trends.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Hill Path Capital is a leading shareholder in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), with 5 million shares worth more than $164 million.
At the end of the second quarter of 2022, 31 hedge funds in the database of Insider Monkey held stakes worth $478 million in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), compared to 36 the preceding quarter worth $762 million.
2. Bloomin’ Brands, Inc. (NASDAQ:BLMN)
Number of Hedge Fund Holders: 35
Bloomin’ Brands, Inc. (NASDAQ:BLMN) owns and runs fine dining restaurants. In late July, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.68, beating analyst expectations by $0.06. The revenue over the period was $1.1 billion, up more than 4% compared to the revenue over the same period last year and beating expectations by $20 million. The firm raised guidance numbers for the coming quarter but said the profit benefits from the increased revenues would be offset by higher than expected inflation.
On July 18, Morgan Stanley analyst John Glass maintained an Equal Weight rating on Bloomin’ Brands, Inc. (NASDAQ:BLMN) stock and lowered the price target to $21 from $26, noting that the restaurant sector would face softening sales as consumers face rising pressures.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $219 million in Bloomin’ Brands, Inc. (NASDAQ:BLMN), up from 34 the preceding quarter worth $337 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tremblant Capital is a leading shareholder in Bloomin’ Brands, Inc. (NASDAQ:BLMN), with 2.6 million shares worth more than $43 million.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bloomin’ Brands, Inc. (NASDAQ:BLMN) was one of them. Here is what the fund said:
“We initiated a new position in Bloomin’ Brands, Inc. (NASDAQ:BLMN), in the consumer discretionary sector. The owner and operator of upscale casual dining brands, including Outback Steakhouse and Bonefish Grill, the company utilized the challenges of the COVID-19 pandemic to implement new productivity operations for its waitstaff and focus on improving corporate margins. As we transition from pandemic to endemic, the company should be able to meet the rebound in restaurant attendance with an improved cost structure and better operating leverage. We believe these long-term improvements and increased demand for dining are not reflected in the current share price.”
1. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation (NYSE:MCD) owns and runs fast food restaurants. On August 11, the company announced that it would reopen restaurants in Ukraine that had been closed as a result of the Russian invasion of the country. The firm is still paying over 10,000 employees in the European country in anticipation of the reopening. The company expects to start the reopening process in capital Kyiv. This will be followed by reopening in other parts of Ukraine, especially the Western part where the firm has a strong presence.
On August 16, BMO Capital analyst Andrew Strelzik maintained an Outperform rating on McDonald’s Corporation (NYSE:MCD) stock and raised the price target to $300 from $285, noting that the firm was realizing accelerated growth and share gains in Europe.
At the end of the second quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation (NYSE:MCD), compared to 58 the preceding quarter worth $2.7 billion.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Bridgewater Associates is a leading shareholder in McDonald’s Corporation (NYSE:MCD), with 2 million shares worth more than $511 million.
You can also take a peek at 13 Best Hemp Stocks to Buy Now and Billionaire Dan Loeb’s Top 10 Stock Picks.
