With the recent pullback in the market over the last couple weeks, QSR stocks have also mostly dipped in unison. Notable exception is the gain in Darden on their earnings report this week. Despite what was an expected very poor revenue report, the stock has shown recent strength as it fights to climb its way back to it pre-Covid levels. Investors liked the plans Darden is taking to adapt along with states easing capacity restrictions such as the announcement made this week in NYC.
Regardless of whether states approve 25% or 50% capacity, restaurants must still space with 6′ distances between tables so challenges will remain to restore sales revenues.
I like the way burger chains MCD and SHAK have been acting. SHAK was back to $70 before sliding slightly to $66 where it seems to be consolidating before potentially making another run higher. $63 – $64 is good support.
DPZ Domino’s is a juggernaut trading near all time highs. The pullback to $375 which was the bottom of the range was a great buy point. In contrast, PZZA Papa John’s hit a high of 102.25 on 9-1 and has pulled back all the way to low $80’s. I like this pullback and the divergence in the 3-10 oscillator for a buy especially if it can clear the $85 level. See chart below.
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