NEW YORK (AP) -- A Raymond James analyst upgraded four restaurant chains Wednesday, citing falling prices for ingredients and a return to more normal consumer demand levels in recent weeks after a weak February.
Analyst Bryan Elliott upgraded Brinker International, which owns Chili's, to "Outperform" from "Market Perform." Elliott noted that that new products including pizza and flatbreads could help lift results at the Dallas-based chain. In addition, he noted that Chili's new kitchen equipment and point-of-sale technology should also boost efficiency. He set a $42 price target on the stock.
Elliott also upgraded Chipotle Mexican Grill Inc. to "Market Perform" or "Hold," from "Underperform," citing the recent drop in corn and soybean prices as well as improved customer demand. But he stopped short of recommending a purchase of the stock, noting that the Denver fast-casual chain could hike menu prices around the middle of the year by about 4 percent to 5 percent. Shares of the company are down 23 percent in the past year, while the broader markets are about 10 percent.
He also upgraded Panera Bread Co. to "Market Perform" from "Underperform." He didn't recommend a purchase of this stock either because he said that the St. Louis company is entering a more mature stage of growth.
Buffalo Wild Wings Inc. was upgraded to the firm's highest rating, "Strong Buy," from "Market Perform," with Elliott noting wing prices appear to be normalizing from record high levels. Elliott set a $100 price target on shares of the Minneapolis-based company, implying he expects shares to rally about 15 percent in the next year.
In afternoon trading, Brinker shares were up 23 cents at $37.69. Shares of Buffalo Wild Wings rose 34 cents to $86.83. Chipotle shares edged up 10 cents to $323.19.
Panera shares were up 2 percent at $169.16. Meanwhile, the broader markets edged lower on downbeat economic reports.