Wells Fargo Analysts Get Picky With Restaurants In 2024

Wells Fargo analysts are expecting restaurants stocks to slow their roll this year. They say in a research note that restaurants in their coverage have gained more than the S&P 500 in 4Q, but are facing slower comparable sales trends and traffic in the new year, causing them to be more selective. They’re leaning on companies with potential upside on margins and better traffic trends. McDonald’s is their top pick for the year with strong comparable sales drivers, while Yum! Brands gets a downgrade to equal-weight due to slower traffic and less of a pricing benefit. Yum! shares fall 5% pre-market, while McDonald’s shares are flat.

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