Gordon Haskett analyst Jeff Farmer noted that franchise restaurant company stocks saw an average return of 22.6% in 2019, while company-owned restaurant company stocks lagged with an average return of only 1.1%. He sees "already healthy franchise valuations" further expanding in 2020 and he is most bullish on franchise restaurant names with same-store sales growth catalysts, such as Wendy's (WEN), Wingstop (WING) and Brinker (EAT). Conversely, Farmer is most bearish on company-owned restaurant names which lack visible same-store sales growth catalysts, such as BJ's Restaurants (BJRI), Texas Roadhouse (TXRH) and Cracker Barrel (CBRL).

Evercore ISI raised the firm's price target on Brinker to $50 from $48 and keeps an In Line rating on the shares. After a weather impaired January and February, the firm had hoped for a mid-quarter acceleration in restaurant industry same-store sales growth, but "trends remained lackluster," the analyst tells investors in a Q1 preview for the group. The firm estimates fast food industry same-store sales growth of 1.5% in Q1 and a casual dining segment same-store sales decline of 1%, noting that it recently lowered top-line forecasts for much of its coverage because of the sluggish trends lately.