Restaurant stocks have declined significantly since surging gasoline prices sparked market fears that consumers would cut discretionary spending in certain categories. Companies whose share prices have dropped over the past month include: Wingstop (WING.US) down 33%, Jack in the Box (JACK.US) and Venu Holdings (VENU.US) both down 32%, Dine Brands (DIN.US) down 18%, Bloomin' Brands (BLMN.US) down 16%, The Cheesecake Factory (CAKE.US) down 13%, Chipotle Mexican Grill (CMG.US) and Texas Roadhouse (TXRH.US) both down 9%, and McDonald's (MCD.US) and Starbucks (SBUX.US) both down 7%. However, Mizuho Securities analyst Nick Setyan stated that there is currently no clear evidence that rising oil prices will lead to a slowdown in restaurant industry growth. Setyan and his team view the coffee sector as most attractive, with Dutch Bros (BROS.US) remaining their top pick. Mizuho also continues to believe casual dining companies are in a relatively favorable position, with preferred names including The Cheesecake Factory and Restaurant Brands International (QSR.US). Meanwhile, Chipotle Mexican Grill is the top pick in the fast-casual dining segment. If persistently high oil prices continue to pressure consumers, Mizuho believes fast-food chains Wendy's (WEN.US) and Jack in the Box face the greatest risks. Baird issued a similar assessment, noting that low-income individuals spend a disproportionately high percentage of their income on fuel, meaning the recent oil price surge effectively acts as a direct tax on consumers' discretionary spending for dining out, though double-digit stock declines may have exaggerated the impact.
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