Restaurants

Neutral - Downgrade Alert The National Restaurant Association's Restaurant Performance Index (RPI), a measure of the industry's outlook, has spent most of the past decade above 100, indicating industry expansion (second panel). However, this has not translated into restaurant stock…

Neutral The recently released National Restaurant Association's Restaurant Performance Index turned up solidly in November, building on momentum earned in the early parts of 2017 (second panel). Further, the Expectations Index, a reflection of restaurant operators' six-month outlook, rose to its…

Neutral One quarter ago, we posited that the consolidation phase in the broad consumer discretionary sector restored value and created an attractive entry point and an upgrade in the S&P restaurants sub-index provided an attractive way to execute that thesis. This view has largely played…

Highlights Portfolio Strategy The rally in the S&P restaurants index has run its course and a profit recovery is fully discounted. Lock in profits and downgrade to neutral. Intensified inter-industry competition, the onslaught of online retailers and a rebounding U.S. economy are stiff…

Highlights Portfolio Strategy Contrary to popular perception, non-cyclical sectors have led the market so far this year, while deep cyclical sectors are breaking down, in relative performance terms. Our models point to more of the same ahead. The oversold rebound in the pharmaceutical group…

This year's exodus from casual dining stocks has been justified on the basis of overvaluation and deteriorating industry performance. The National Association of Restaurants (NAR) survey of current performance has dipped into negative territory, as restaurant operators have reported a decrease…

Highlights Portfolio Strategy Boost restaurant stocks to neutral, as same-store sales should improve next year. A further upgrade requires evidence of top-line traction. The exodus from health care stocks represents an overreaction rather than a downshift in fundamental forces. Stay long.…

The S&P restaurants index continues to deflate in relative performance terms and downside risks remain intact. The top panel of the chart shows that the Restaurant Performance Index (RPI, courtesy of the National Restaurant Association) has taken a turn for the worse. Historically, momentum…

Overall consumer spending growth has been sub-par, as the windfall from lower energy prices has translated largely into a high personal savings rate rather than increased consumption growth. As a result, performance among retailing stocks has become highly fragmented, as marked divergences in…