Yum Brands (YUM - Get Report) , McDonald's (MCD - Get Report) and Chipotle (CMG - Get Report) were rising Wednesday after analysts at Evercore initiated coverage on the fast-food restaurants with bullish ratings and price targets.
McDonald's was initiated with an outperform rating and $225 price target, which represents an 11% upside from its previous closing price. The stock was up 0.8% to $204.88 on Wednesday.
"McDonald's stock and its company have come a long way in the transformation under Steve Easterbrook since 2015, and to some degree we believe this is already recognized with the stock trading at 23.8x 2020 EPS," the note read.
Chipotle also given an outperform rating. The stock gained 0.9% to $736.07.
"Over the next five years, we forecast 23% annual EPS growth, which we believe could be conservative as the chain has recently begun driving rapid mobile app adoption, with other sales driving initiatives to follow. While we are taking a conservative view for 2019/2020 earnings (given potential trade related food cost headwinds) we see sale drivers as margin accretive," Evercore said.
Yum Brands was given an outperform rating and $120 price target that also represents an 11% upside. Shares rose Wednesday by 1.3% to $108.99.
"We believe there is still some underappreciated near-term momentum and long-term sustainability at Yum! Brands. The company is beginning to enjoy the fruits of a more focused organization that is focused on driving accelerating unit growth and consistent low- to mid-single digit SSS growth," Evercore said.