Home Most Popular Tech Stocks These Stocks are on the Menu for Potential Growth in Outdoor Dining

These Stocks are on the Menu for Potential Growth in Outdoor Dining

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These Stocks are on the Menu for Potential Growth in Outdoor Dining

One area of the economy that’s sizzling right now is the outdoor dining space, with the Zacks Retail-Restaurants Industry currently in the top 19% of over 250 Zacks industries.

The post-pandemic recovery of outdoor dining is heating up, and many restaurants and fast food chains are poised to benefit from easing inflation. Here are several Zacks Retail-Restaurants stocks with huge potential right now.

Brinker International (EAT)

Brinker International, the operator and franchiser of popular restaurant chains Chile’s Grill & Bar and Maggiano’s Little Italy, exceeded fiscal first quarter expectations earlier this month.

First quarter earnings of $0.28 per share easily beat estimates of $0.03 per share and soared from an adjusted loss of -$0.57 a share in the prior-year quarter. Quarterly sales of $1.01 billion slightly surpassed estimates of $1 billion and rose 6% year over year.

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Now forecasted, Brinker International’s annual earnings are set to climb 26% in its current fiscal 2024 to $3.57 per share compared to EPS of $2.83 a share last year. Plus, FY25 EPS is projected to rise another 9% and Brinker International shares trade at an attractive 9.9X forward earnings multiple – a noticeable discount to the industry average of 25.4X and the S&P 500’s 21.4X.

Carrols Restaurant Group (TAST)

Carrols Restaurant Group, the largest Burger King franchisee in the U.S. with over 800 restaurants, more than doubled Q3 earnings estimates earlier in November.

Third quarter earnings of $0.16 per share soared from an adjusted loss of -$0.14 per share a year ago. Furthermore, Q3 sales of $475.76 million rose 7% YoY despite slightly missing estimates of $476.38 million.

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Carrol Group’s stock looks intriguing with the company expected to post an annual profit of $0.42 per share in 2023 compared to an adjusted loss of -$0.70 a share last year. Fiscal 2024 earnings are expected to rise another 7% to $0.45 a share. The stock trades at $7 a share and 18.2X forward earnings, nicely beneath the industry average and the benchmark.

Wingstop (WING)

Wingstop, a popular franchisee-focused restaurant, saw its Q3 results come in much better than expected earlier in the month.

Q3 earnings of $0.69 per share beat expectations by 32% and climbed from $0.45 a share in the prior-year quarter. Quarterly sales of $117.10 million topped Q3 estimates by 7% and soared 26% from $92.67 million a year ago.

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Wingstop’s annual EPS growth is especially attractive with FY23 earnings now projected to leap 29% to $2.39 per share versus $1.85 a share in 2022. More impressive, FY24 earnings are forecasted to climb another 17% to $2.80 per share.

Takeaway

Brinker International, Carrols Restaurant Group, and Wingstop’s stocks all boast a Zacks Rank #1 (Strong Buy) as well as an “A” Zacks Style Scores grade for Growth. Now is the ideal time to buy into these sizzling potential growth stocks.

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