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BUZZ-Bernstein sees signs of demand rebound for US restaurants in 2025

ReutersJan 22, 2025 1:09 PM

** Bernstein analysts see initial signs of demand recovery for U.S. restaurants in 2025 on stable food-away-from-home trends

** Brokerage upgrades Olive Garden-operator Darden Restaurants DRI.N to "outperform" from "market-perform"; raises PT to $215 from $180

** Says DRI will benefit from improved demand among middle-income groups and partnership with food delivery arm of Uber Technologies UBER.N

** Adds that heightened promotional environment for the sector will continue in H1, but ease off in H2

** Bernstein notes Chipotle Mexican Grill CMG.N and Starbucks SBUX.O less exposed to risks from a potential higher adoption of weight-loss drugs

** Chinese tariff-related policies may shake profitability for the sector, but effects are likely to materialize only beyond 2026 - Bernstein analyst Danilo Gargiulo

** Downgrades Yum Brands YUM.N to "market-perform" from "outperform", citing intense value wars to pressure KFC and Pizza Hut restaurants

** For McDonald's MCD.N, brokerage believes aggressive value orientation will continue to attract traffic and fuel recovery in U.S.

** DRI, YUM stock rose 22.4% and 2.7% in 2024, respectively, while MCD fell 2.2%

(Reporting by Aamir Sohail in Bengaluru)

((Aamir.Sohail@thomsonreuters.com;))

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