If you're a data-driven investor, you may be surprised to learn that fast-casual restaurant stocks are some of the best investment opportunities in the back half of 2024. The headline economic news tells us that consumers are eating at home more, and inflation is pricing them out of even fast food.
But a surprise beneficiary of sticky inflation is the fast-casual sector. Why might that be? Primarily, it comes down to price. As the price of many fast food items moves higher, the price difference between the two types of chains is narrowing. And since fast-casual dining provides an actual or perceived healthier option, there's a path to winning those discretionary dollars.
This is a sector to watch, especially now that we're in the summer travel season. While the fall may have its own issues, the outlook for summer travel still looks bright. That means higher revenues, higher earnings, and likely a higher stock price for these fast-casual restaurants.
Quick Links
- Chipotle Mexican Grill
- CAVA Group
- Darden Restaurants
- Brinker International
- Chuy’s
- Bloomin’ Brands
- Sweetgreen
#1 - Chipotle Mexican Grill (NYSE:CMG)
On June 26, 2026, Chipotle Mexican Grill Inc. (NYSE: CMG) started trading for the first time after announcing its 50-for-1 stock split. This will, perhaps, make the stock more accessible for investors. But the company's valuation won't change. And trading at around 58x forward earnings, it's fair to ask if the stock offers good value for investors.
One reason to believe that it may be a value comes from Chipotle's commitment to opening new stores over the next several years. Based on its current schedule, the company is on track to open approximately 300 new restaurants in 2024.
However, the company's growth prospects aren't entirely due to expansion. CMG stock has been one of the best-performing stocks for many years. Much of that has to do with the company's ability to generate comparable restaurant sales growth. In the last quarter, this came in at 7% year over year.
Chipotle stock trades near the top of its 52-week range. However, the Chipotle Mexican Grill analyst forecasts on MarketBeat give the stock a consensus Moderate Buy rating. Investors can look for any pullbacks as an opportunity to buy or add to a position.
About Chipotle Mexican Grill
Chipotle Mexican Grill, Inc, together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. It sells food and beverages through offering burritos, burrito bowls, quesadillas, tacos, and salads. The company also provides delivery and related services its app and website. It has operations in the United States, Canada, France, Germany, and the United Kingdom.
Read More - Current Price
- $61.87
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $66.55 (7.6% Upside)
#2 - CAVA Group (NYSE:CAVA)
While Chipotle grabs most of the headlines, CAVA Group Inc. (NYSE: CAVA) is worth a look. In fact, Gabriel Osorio-Mazilli recently gave investors several reasons to believe that CAVA may be a better value to Chipotle.
First, the company’s value per restaurant of $30.3 million outpaces Chipotle. Analysts are also forecasting 12-month earnings growth of around 35%, which is higher than the 20% predicted for Chipotle. Fundamental investors are particularly drawn to positive, free cash flow, which CAVA delivered for the first time in its most recent quarter.
For the rest of 2024, CAVA expects to have 50 to 54 new restaurants, net. That’s higher than the forecast of 48 to 52 net openings it offered in February. This is likely to push earnings and same-store sales higher.
The CAVA Group analyst ratings on MarketBeat give the stock a Moderate Buy rating. Short interest of just over 10% may create short-term headwinds, but CAVA stock is another pick to consider owning on any dip.
About CAVA Group
CAVA Group, Inc owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc was founded in 2006 and is headquartered in Washington, the District of Columbia.
- Current Price
- $119.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $143.80 (20.8% Upside)
#3 - Darden Restaurants (NYSE:DRI)
Darden Restaurants Inc. (NYSE: DRI) is not a pure play on the fast-casual trend. Brands such as The Capital Grille and Ruth’s Chris Steakhouse fall under the company’s umbrella. However, the company is also home to the Olive Garden, LongHorn Steakhouse, and Bahama Breeze brands, among others. That makes it worth considering as one of the restaurant stocks to buy.
In a strong economy, this diversity works to the company’s strengths. However, with the challenges that currently exist in the economy, the picture is more mixed. For example, same-store sales at Olive Garden were down slightly year-over-year in 2023. However, LongHorn Steakhouse showed mid-single-digit growth.
The key takeaway for investors is that Darden continues to beat on the top and bottom lines on a year-over-year basis despite tough comparisons to 2023. And the Darden Restaurants analyst forecasts on MarketBeat project 9.8% earnings growth in the next 12 months which supports a Moderate Buy rating on DRI stock.
About Darden Restaurants
Darden Restaurants, Inc, together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Capital Burger brand names.
Read More - Current Price
- $187.59
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 16 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $186.60 (0.5% Downside)
#4 - Brinker International (NYSE:EAT)
Brinker International Inc. (NYSE: EAT) is the parent company of brands such as Chili’s and Maggiano’s Little Italy. The company is still growing, but its first quarter 2024 earnings showed that growth is slowing. However, EAT stock has been up 64% in the last three months.
That may have some investors believing that the stock is overvalued. And the Brinker International analyst forecasts on MarketBeat seem to agree. The stock does have a consensus rating of Hold with a price target around $50, which is 32.9% lower than its current price. That said, analyst ratings are often a case of "What have you done for me lately?" On June 25, 2024, Stifel Nicolaus reaffirmed its Buy rating on EAT stock and raised its price target to $90 from $62.
A forward P/E of 18x suggests the stock may have residual value. And comparable store sales were up 3.3% year-over-year in the last quarter despite a slowdown in restaurant traffic. This suggests that the company’s efforts for greater efficiency are paying off.
About Brinker International
Brinker International, Inc, together with its subsidiaries, engages in the ownership, development, operation, and franchising of casual dining restaurants in the United States and internationally. It operates and franchises Chili's Grill & Bar and Maggiano's Little Italy restaurant brands.
Read More - Current Price
- $134.26
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 15 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $94.63 (29.5% Downside)
#5 - Chuy’s (NASDAQ:CHUY)
So far, most of the restaurant stocks on this list have been trading near their 52-week high. That’s not the case with Chuy’s Holdings Inc. (NASDAQ: CHUY). The stock is trading near its 52-week low, with most of that decline coming in the last three months, during which CHUY stock has dropped 24%.
The culprit is revenue, which is starting to show weakness not only compared to analysts’ estimates but also on a year-over-year basis. The company cited unfavorable weather and an early Easter as reasons for the miss. Usually, investors like to hear something more profound than that, but if you take the company at its word, you would expect the top line to improve.
Analysts believe that’s the case. They project 11.9% earnings growth in the next year and have a consensus price target of $38.14, which would be a 49% increase from the stock’s price on June 25, 2024.
About Chuy's
Chuy's Holdings, Inc, through its subsidiaries, owns and operates full-service restaurants under the Chuy's name in the United States. The company was founded in 1982 and is headquartered in Austin, Texas.
- Current Price
- $37.48
- Consensus Rating
- Hold
- Ratings Breakdown
- 0 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $33.25 (11.3% Downside)
#6 - Bloomin’ Brands (NASDAQ:BLMN)
Bloomin’ Brands Inc. (NASDAQ: BLMN) is another company with a stock that’s trading near its 52-week low. Bloomin’ is the parent company of Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill. It also owns the Fleming’s Prime Steakhouse & Wine Bar chain.
BLMN stock is down 31.7% in 2024, and it’s all about earnings, which are down year-over-year. This could be evidence of a weakening consumer, which could explain, in part, the 5.2% increase in short interest in the stock in May.
However, with the stock trading at about 7.8x forward earnings, it’s worth a look, particularly if the Federal Reserve lowers interest rates, which could positively affect holiday entertainment plans.
One distinguishing feature of BLMN stock among restaurant stocks is that it pays a dividend — and one with a 5.08% yield. While this shouldn’t be a primary reason to own the stock, it is a nice benefit, particularly when shares are trading near their 52-week low at around $18.91.
About Bloomin' Brands
Bloomin' Brands, Inc, through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants in the United States and internationally. The company operates through two segments, U.S. and International. Its restaurant portfolio has four concepts, including Outback Steakhouse, a casual steakhouse restaurant; Carrabba's Italian Grill, a casual Italian restaurant; Bonefish Grill; and Fleming's Prime Steakhouse & Wine Bar, a contemporary steakhouse.
Read More - Current Price
- $11.95
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 9 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $19.09 (59.8% Upside)
#7 - Sweetgreen (NYSE:SG)
If you’re an investor looking for a place where trends collide, Sweetgreen Inc. (NYSE: SG) is one of the restaurant stocks to watch closely. SG stock is up 166.7% in the last 12 months, making it one of the best-performing stocks during that time.
The fast-casual restaurant chain focuses on providing healthy food at scale. It doesn’t take a giant leap to suggest that the company may strongly benefit from the GLP-1 trend that’s sweeping the nation. Patients who are on GLP-1 drugs are strongly encouraged to consume a diet rich in high-fiber foods such as vegetables, fruits, and whole grains.
Although SG stock is trading near the top of its 52-week range, analysts are beginning to move their price targets higher. The key milestone will be seeing the company report positive earnings. That still looks to be down the road a little way, and with short interest around 12%, Sweetgreen may be one for the watch list now, but one you should monitor closely.
About Sweetgreen
Sweetgreen, Inc, together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.
- Current Price
- $35.10
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $39.80 (13.4% Upside)
You may be concerned about investing in restaurant stocks, particularly if you've noticed that traffic patterns are still down from 2019. But this is a case where investors really have to look under the hood of a company's earnings report to see what's happening.
When events like a global pandemic occur, society changes. Sometimes, those changes are subtle. But often, like airport screening after 9/11, they are abrupt and permanent.
Even before 2020, restaurants were setting the stage for this transition, with many businesses already adopting digital technology to facilitate online ordering. When COVID-19 hit, these restaurants were leaps and bounds ahead of other chains.
For many American families in 2024, "dining out" means “carryout." It simply isn't necessary to eat on-premises anymore. Today, online ordering is table stakes for companies that want to compete in this sector.
The companies on this list have embraced a digital strategy and are well-positioned to capture market share in an evolving restaurant stock landscape.
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