) and Outback Steakhouse (OSI
). At the same time, the brokerage downgraded Wendy's (WEN
) and AFC Enterprises (AFCE
Analyst Mark Kalinowski says he upgraded EAT to outperform from in-line and OSI to in-line from underperform. He downgraded AFCE to underperform from in-line, and WEN to in-line from outperform.
He says while he's favored the casual-dining sector relative to the fast-food sector for some time, the gap between his views has now widened. Kalinowski cites a recent wait-list survey showing strong demand for the casual dining experience. He also views rising gas prices as bad for the fast-food sector, which is already suffering from aggressive menu pricing and general consumer malaise.