Dashboard: Capital Markets

Nov 1, 2022 | Dashboard, Restaurant Research

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Stock Performance

THE ECONOMY NEEDS A LITTLE LOVE FROM THE ENERGY PRODUCERS  

The good news is that Americans are largely employed and the GDP is printing in the black. However, the macro dashboard below reveals the following headwinds: (1) higher interest rates; (2) stalling disposable income growth; (3) rising consumer debt & a substantial drop in the savings rate; (4) significant inflation in energy prices and rent. So long as the powers that be decide to start increasing the supply of oil all is not lost.  

Early 3Q22 results from the publicly traded restaurant companies are encouraging, and this is reflected in the stock price performance outlined below. Check out our nobull 15 second posts for quick take-aways from the early reporting here.

Unit-Level Valuation Metrics Provide Insight into Restaurant Stock Prices (Sum-of-Parts)

FRANCHISE VALUATION OUTLOOK GROWS LESS BEARISH

Unit-level buyers are starting to factor-in positive news currently being reported by the public companies. 

Cap Rates

CAP RATE SPREAD IS AT RECORD LOW AS SELLERS HOLD THEIR GROUND

The cap rate vs. 10-year gap continued to shrink in October as sellers are reluctant to lower their selling prices despite a higher rate environment.

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Jack in the Box Corporate Insights

Jack in the Box results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night.

How to Circumvent Food Shortages?

The vulnerabilities of a long-distance supply chain have become very evident over the last couple of years, especially when it comes to farming.

This Week in Summary 11/18/2022

We want to spotlight Target this week which provides valuable insight on consumer spending.

How Would You Value the Federal Reserve?

Here is an idea: let’s take the Federal Reserve public in the world’s largest IPO.

How to Pass Along Inflationary Costs Without Losing Traffic?

Wendy’s is avoiding standardized menu price increases and turning to strategic increases designed not to price out lower income consumers.

Investors in Retail Stocks Think Consumers are Back

Recent retail stock gains would suggest that investors are confident in consumer strength, despite continuing inflationary issues.

Papa John’s & Chili’s Reveal the Plight of Cash Strapped Consumers

The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?

This Week in Summary 11/11/2022

Market melt up & the midterm elections

DoorDash’s Grip on Labor Costs is Funding New Investments

Doordash’s platform generated +10% of all restaurant industry sales.

3Q Results for Bloomin’, Texas Roadhouse & Cheesecake

Full serve restaurant sales performance is currently a function of customer demographics.

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