- Morgan Stanley (NYSE:MS) says digital restaurant delivery is surging as it warns on the casual dining sector. The analyst team relies on the latest AlphaWise survey in making its assessment. The bear case scenario is lowered on BJ's Restaurants (NASDAQ:BJRI), Bloomin' Brands (NASDAQ:BLMN), Buffalo Wild Wings (NASDAQ:BWLD), Cheesecake Factory (NASDAQ:CAKE), Brinker International (NYSE:EAT), DineEquity (NYSE:DRI) and Red Robin Gourmet Burgers (NASDAQ:RRGB) due to the impact on margins of the delivery trend.
- The outlook is different for the fast-food sector as the investment firm factors in the less cannibalistic impact of delivery on sales. Incremental benefits from an increase in delivery in the future are seen for Chipotle (NYSE:CMG), Dunkin' Brands (NASDAQ:DNKN), Jack In The Box (NASDAQ:JACK), El Pollo Loco (NASDAQ:LOCO), McDonald's (NYSE:MCD), Noodles (NASDAQ:NDLS), Restaurant Brands International (NYSE:QSR), Starbucks (NASDAQ:SBUX), Shake Shack (NYSE:SHAK), Wendy's (NYSE:WEN), Wingstop (NASDAQ:WING) and Yum Brands (NYSE:YUM).
- Despite the surge in delivery, Grubhub (NYSE:GRUB) is downgraded to Equalweight from Overweight due to increase competiton from Uber (Private:UBER) and Amazon (NASDAQ:AMZN).
- "We note our Alphawise data show UberEats is gaining traction too with a 800bp increase in user adoption (now at 10%). Our Amazon Restaurant Delivery math also shows how a scaled restaurants business could subsidize 1-hour PrimeNow Delivery," notes MS.
- Sources: Bloomberg and StreetInsider.com
- Previously: Amazon seen making another food play (June 19)
- Related ETF: MENU.
- Now read: Amazon Is A Special Snowflake
Original article