A Postive 2011 for Restaurants

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Baird analyst David Tarantino sees good things ahead for the restaurant industry in 2011 as consumers feel a bit more comfortable spending.

And he sees growing demand overcoming the possible drag from rising costs in the coming year, and that would support earnings and stock growth for the year.

Tarantino said companies that cater to higher-income customers, such as fast-casual restaurants and cafe chains, are best-positioned, though those with lower- and middle-income consumers can benefit as well.

Tarantino listed Chipotle Mexican Grill Inc. and Peet’s Coffee & Tea Inc. among his top picks, given their strong earnings growth momentum and healthy financial position.

Via CNBC/The Associated Press

Posted 1/10/11 by Jillian.