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 ( BKC) and Chipotle Mexican Grill ( CMG). >>Sell Burger King Shares Now: Analyst Here then is a look at analysts' top restaurant stock picks.