Yum China Holdings (YUMC)

Dive into the restaurant stock world and you’ll find Yum China Holdings (NYSE: YUMC), a $15.5 billion market cap giant boasting the attraction of 22 out of 33 analysts who rate it as a “buy.” The median target price stands at an alluring $55.07, a whopping 43% surge awaiting lucky investors. YUMC, the operator of KFC and Pizza Hut in China, has taken a hit due to reduced same-store sales growth attributed to economic challenges in the Asian country.

Despite a nearly 40% decline in stock value over the past year, YUMC shows promise with a strategic plan unfolding. A scintillating glimpse into its 2023 achievements reveals a 21% leap in system-wide sales and an impressive 7% boost in same-store sales. The company also reported a substantial operating profit of $1.1 billion, signifying a remarkable 79% year-on-year growth.

As the year progresses, YUMC intends to engage in stock buybacks totaling $1.25 billion and up its quarterly dividend to a generous 16 cents. The ambitious goal of expanding its footprint with a target of 1,700 new stores in 2024, aiming for a total of 20,000 by the end of 2026, demonstrates resilience and forward-thinking acumen in these challenging times. YUMC harbors undeniable potential and presents a lucrative investment avenue in the restaurant sector.

Arcos Dorados (ARCO)

Move your gaze to Arcos Dorados (NYSE: ARCO), the $2.4 billion market cap giant shining brightly on the stock exchange with all six analysts unanimously endorsing it with a “buy” rating. Sporting a median target price of $14.30, a promising 27% surge from its current valuation awaits wise investors who choose to ride this wave. Focusing mainly on McDonald’s restaurants in Latin America and the Caribbean, Arcos is a key player in the region’s culinary landscape.

The numbers tell a compelling story – with $4.33 billion in revenue in 2023, a significant 19.6% upsurge from the previous year, and a net income of $181.3 million, a notable 29.2% increase. Trading at a modest 13 times its 2023 earnings of 86 cents, Arcos shines even more brightly compared to McDonald’s, which commands a multiple almost double its own.

Having recommended ARCO stock back in January 2023 at a modest $8.70 per share, the impressive 29% appreciation in value since suggests that it remains a lucrative pick even at double-digit prices. The allure of Arcos Dorados in the restaurant industry remains undiminished.

Portillo’s (PTLO)

Portillo’s (PTLO) Expansion: A Hotdog Deal for Investors?

Portillo’s (NASDAQ:PTLO) finds itself in a pickle, labeled the tiniest fry of three in the restaurant basket, with a market cap simmering at $967 million. Despite its current decline by 15%, seven of the ten Wall Street seers branding its stock a “buy” insurgency believe it’s worth mustard with a median target of $21.11, a mouthwatering 59% above the current market price.

All three fast-food stalwarts on the list incurred losses in the fiscal dine-out of 2024, with Portillo’s sizzling up the worst decline. The purveyor of Chicago-style cuisine stepped onto the Wall Street grill back in October 2021 at a princely $20 per share. Currently, it undergoes trading at a humble 34% discount to its IPO inauguration.

From a modest 67 outlets in nine states during its Wall Street debutante ball, Portillo’s has roared to a tasty tally of 84 eateries spread across ten states, up from 72 last year’s consult. In a strategic move that could be music to investors’ ears, 2023 saw new eateries sprout in Arizona, Florida, Illinois, and Texas, projecting further expansion with the promise of at least nine new locations in 2024.

Portillo’s sets the table for 2024 with a smorgasbord of forecasts including a restaurant unit growth of 12-15%, low single-digit same-store sales uptick, mid-teens revenue growth, and a delectable low teens spike in adjusted EBITDA.

In a hotdog of a March update, Jefferies analysts aimed their mustard at Portillo’s, slicing the price target by $3 to $21. Despite this, the financial gourmet maintained its “buy” rating, seasoning the market with confidence. Nay-sayers presaging storm clouds over the restaurant’s financial kitchen must chew on the seasoned perspective that Portillo’s expansion recipe holds secret ingredients for long-term success.

On publication day, Will Ashworth confirmed no direct or indirect stake in the discussed securities. The views expressed are personal and align with the InvestorPlace.com Publishing Guidelines.