Starbucks Shines, QSR Faces Challenges: BofA's 2025 Restaurant Outlook

BofA Securities analysts Sara Senatore and Katherine Griffin expressed their views on the restaurant industry for the year ahead 2025.

The analysts expect slow but still healthy job growth to support restaurant demand, industry pricing to moderate, and promotional activity to rise as input prices fall.

Notably, the analysts write that the industry growth in 2024 aligned with historical averages—Blackbox industry SSSG was -0.2% compared to the 2013-2019 average of -0.1%, and PCE growth was +4.9% versus the pre-COVID average of +5.1%, according to the analysts.

However, the analysts add that growth patterns were atypical, with fine dining and traditional Quickservice underperforming, while midscale and casual dining performed better.

Senatore and Griffin attribute this shift to a reversion to pre-COVID consumption behaviors and expect more typical industry trends in 2025.

The analysts maintain a Buy rating on Starbucks Corporation SBUX with a price forecast of $117.

The analysts remain confident in the brand’s strength and the potential to reallocate resources to more productive areas.

Also, the analysts reiterated an Underperform rating on Restaurant Brands International Inc. QSR, expecting reinvestment needs to constrain topline and EPS growth.

Also, the analysts cut the revenue forecasts for QSR, anticipating increased competitive pressures.

On the other hand, Senatore and Griffin lowered the price forecast on Krispy Kreme, Inc. DNUT to $14 from $17 prior.

The analysts also lowered the company’s estimates, reflecting slightly lower topline growth and higher operating expenses in the first half of 2025.

Meanwhile, the analysts maintained a price forecast of $87 for Sysco Corporation SYY, and higher EBITDA estimates reflected lower operating expense assumptions.

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