{{0|Piper Sandler}} launched coverage of the full-service restaurant sector in a note Tuesday, stating that there are opportunities for individual operators to take share.
Piper Sandler analysts initiated coverage of BJ's Restaurants, Inc. (NASDAQ:BJRI), Bloomin' Brands, Inc. (NASDAQ:BLMN), The Cheesecake Factory (NASDAQ:CAKE), Cracker Barrel (NASDAQ:CBRL), Chuy’s Holdings, Inc. (NASDAQ:CHUY), Denny's Corporation (DENN), Darden Restaurants, Inc. (NYSE:DRI), Dine Brands Global Inc. (NYSE:DIN), and Brinker International, Inc. (NYSE:EAT), with Neutral ratings. Furthermore, First Watch Restaurant (NASDAQ:FWRG), Dave & Buster's Entertainment (NASDAQ:PLAY), and Texas Roadhouse (NASDAQ:TXRH) were assigned Overweight ratings.
"At a high level, there is no denying that the Full Service segment continues to lose share to Limited Service, which makes for somewhat of a tricky backdrop for the sector as a whole," wrote the analysts.
"With that said, we note that Full Service restaurants in the U.S. represent a large and fragmented category with ~$264 billion of spend last year, and we think there are opportunities for individual operators to take share and add value in the years to come if the right strategies are embraced."
The analysts said FWRG is the firm's top pick. For TXRH, they see DD% upside in the "no recession" scenario, while they view PLAY as "more of an idiosyncratic and a deep value idea."