Deutsche Bank's Q2 Report Cards For 10 Fast-Food/Fast-Casual Stocks

Now that Q2 earnings season has come and gone for most restaurant stocks, Deutsche Bank analyst Brett Levy has provided a summary of highlights and topics of interest for the restaurant stocks under his coverage. Here’s a look at what Levy had to say:

1. McDonald’s Corporation MCD: Investors’ primary concern is how the company will handle the difficult +6 percent comps ahead in Q4 when it logged a 3.0 percent sequential SSS slowdown in Q2.

2. Starbucks Corporation SBUX: Investors are worried that the Q2 +4 percent SSS growth will be the new long-term run rate, but management is convinced that the company will soon regain its momentum.

3. Yum! Brands, Inc. YUM: The key story is the valuations of the company’s “core” business, which fell just short of expectations in Q2, and its China business, which posted its fourth consecutive quarter of positive SSS growth.

Related Link: Newest Fast-Food Battle Pits Chipotle Against Burger King

4. Chipotle Mexican Grill, Inc. CMG: The company didn’t deliver the SSS stabilization Chipotle bulls were hoping for in Q2, but the Chiptopia rewards program could be positive catalyst.

5. Panera Bread Co PNRA: Panera delivered relatively strong Q2 results in a relatively weak environment, including improving margins and +3.1 percent Q3 SSS growth to date.

6. Texas Roadhouse Inc TXRH: Overall Q2 results were in-line with expectations, but decelerating SSS numbers in June and July produced a major market selloff.

7. Buffalo Wild Wings BWLD: For the first time as a public company, SSS numbers declined for the second consecutive quarter and margins came in softer than expected.

8. Bloomin’ Brands Inc BLMN: Q2 EPS was in line with expectations, but the company’s full-year EPS guidance dropped slightly. Bloomin’ has been suffering from the difficult macro environment, but Levy noted that it has also been underperforming its peers.

9. Ruth’s Hospitality Group, Inc. RUTH: Although EPS was on the soft side, the company delivered 1.5 percent SSS growth on the quarter and reiterated its line-item guidance.

10. Del Frisco’s Restaurant Group Inc DFRG: The company reiterated its EPS targets and expects 2016 SSS growth to come in between 0 and +1.0 percent.

Deutsche Bank’s top stock picks among the restaurants mentioned above are Buy-rated McDonald’s and Ruth’s Hospitality.

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Disclosure: The author holds no position in the stocks mentioned.