Jefferies analyst Andy Barish upgraded Chefs’ Warehouse (CHEF) to Buy from Hold with an unchanged price target of $43. The analyst maintains a positive view on the U.S. restaurant and foodservice distribution sector into 2023, but turned more selective to reflect greater chance of a recession next year. McDonald’s (MCD), Bloomin’ Brands (BLMN), Dave & Buster’s (PLAY) and Performance Food Group (PFGC) are Barish’s top picks. The analyst sees continued demand for full-service restaurants, and believes any potential sales declines will be offset by lower food inflation and cost management. Barish is less positive on limited service restaurants, citing mixed same-store-sales and margin trends. He believes pricing power for limited service is less robust than in full-service. Meanwhile, foodservice distribution set for a shift in 2023, with a "relatively favorable" setup on better supply chain efficiencies and fewer cost headwinds, Barish tells investors in a research note.
Published first on TheFly
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