Analysts at Wedbush recently released a Q1 earnings preview for restaurant stocks, many of which will be releasing earnings within the next two weeks.
Analysts picked their two favorite stocks and commented on several other names as well.
Top Two Picks
Analyst choose Kona Grill Inc KONA 0.81% and The Habit Restaurants Inc HABT 0.75% as their top two pre-earnings picks. Analysts forecast strong same store sales (SSS) growth from Kona in Q1 and believe that the share price has room to the upside.
Habit recently pre-announced strong SSS numbers, but analysts note that earnings expectations don’t fully reflect the pre-announced numbers. Analysts believe that Habit could issue strong guidance when it reports.
Positive On Noodles & Co NDLS 2.18%
Analysts point to the high (32 percent) short interest in Noodles’ stock as a potential catalyst if the company reports better-than-expected numbers. “Our Q1 checks indicate an inflection in SSS growth in the second half of Q1 which could render at least the midpoint of annual SSS growth guidance of 2.5-4% achievable,” analysts explain.
Cautious On Buffalo Wild Wings Inc BWLD 0.75%
Analysts predict that SSS growth in the first half of 2015 could come in short of expectations. They believe that shareholders run the risk of earnings disappointment and that there is a lack of potential positive catalysts to balance out that risk at this time.
Other Names
Wedbush has Outperform ratings on Kona and Habit and Neutral ratings on Buffalo Wild Wings and Noodles.
In addition to the stocks mentioned above, Wedbush has Outperform ratings on Fiesta Restaurant Group Inc FRGI 3.21%, Panera Bread Co PNRA 0.24% and The Wendy’s Co WEN 1.96%. Wedbush has Neutral ratings on Chuy’s Holdings Inc CHUY 2.33% and Denny’s Corp DENN 0.51%.
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