We believe that market prices for large-cap restaurant stocks are fully baking in an immediate and total recovery with no second wave and unlimited stimulus support. Given how some states are currently re-opening, by June/July we could be seeing the start of rolling second waves of COVID-19 and the reality of a much slower pace of sales recovery even in states like Texas.
The following slides are taken from Governor Abbott’s guidance to re-open the restaurant industry in Texas. It is important to note that Texas was relatively unaffected by COVID-19. The Houston area and to a lesser degree Dallas and El Paso is where most of the caseload occurred.
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