Oppenheimer Cooks Up 2017 Outlook For 6 Restaurant Stocks

Restaurant stocks closed 2016 higher by 13 percent, which is 3 percentage points better than the S&P 500 index. Brian Bittner of Oppenheimer cited the group's gain to the "post-election multiple expansion."

Now that valuations of restaurant stocks are trading at "familiar top-heavy levels" at a time when industry-wide sales are falling, investors should be selective of what stocks they hold in their portfolio.

Here is a list of restaurant stocks Bittner likes and is cautious on:

• Shares of Panera Bread Co PNRA were upgraded to Outperform from Perform with a newly established $240 price target and named a top pick.
• Starbucks Corporation SBUX (Outperform rated, $65 price target) and Jack in the Box Inc. JACK (Outperform rated, price target raised to $125 from a previous $115) were also named as top picks.
• Bob Evans Farms Inc BOBE was downgraded to Perform from Outperform with no assigned price target (from a previous $55).
• Among the Market Perform rated names, the analyst is most cautious on Chipotle Mexican Grill, Inc. CMG (no assigned price target).
• Among the Market Perform rated names, the analyst is most constructive on BJ's Restaurants, Inc. BJRI (no assigned price target).