NEW YORK (
TheStreet) -- The restaurant sector is poised for moderate growth this earnings season as uncertain economic times leaves consumers keeping a close watch on their limited discretionary funds.
Despite tepid expansion, some analysts remain optimistic for the short-term. "The combination of "still-recovering sales and still-benign costs (both food and labor)" makes for "a positive backdrop to
third quarter of 2010
results," noted Deutsche Bank analyst Jason West.
Stifel Nicolaus analyst Steve West said that "easy comps and extensive cost savings should offset strained sales from depressed consumer spending, boosting restaurant
third-quarter 2010 earnings-per-share
growth of 6% (though still less than 10% on average)."
>>Restaurant Stocks: Earnings to Watch
DB's West noted that "combining a fragile recovery and rising food costs with reasonably full valuations, suggests investors need to be selective when picking restaurant stocks." He recently downgraded shares of
Burger King Holdings
Chipotle Mexican Grill
(CMG - Get Report)
>>Sell Burger King Shares Now: Analyst
Here then is a look at analysts' top restaurant stock picks.