Our Sentiment Scorecard, below, incorporates both sell-side and buy-side sentiment. Below are some of our thoughts.
As the table, below, indicates MCD and YUM as still loved by the investment community. It will be interesting to see if there is any change in MCD’s score as the short interest post earnings is factored in. We expect MCD to continue to perform well from a fundamental perspective at least through 1Q12.
EAT remains hated by the investment community but we would highlight that, even after the top-line miss that spurred a sell-off in the stock on Tuesday, analysts raised their FY12 estimates. The stock gained too much too fast but the fundamental turnaround of the Chili’s concept is far from over.
BWLD remains our favorite stock on the short side. Short interest is not low but there are others with significantly higher levels of short interest in the casual dining space. What we believe will change more meaningfully for BWLD, however, as our thesis plays out, is sell-side sentiment. The analyst community has zero sell ratings on the stock. We expect that to be revised in the next few weeks.
SBUX reports today and remains very well-liked by the investment community. The pressure is on for the company to perform at a very high level and there is plenty of room for sentiment to turn. We will be watching the top line and CPG margins particularly closely.