Wolfe Research analyst Greg Badishkanian issued a split verdict on the restaurant sector this week, downgrading Starbucks to Peer Perform from Outperform while simultaneously upgrading Brinker International and initiating Wingstop with Outperform ratings. The divergence draws a sharp line between a turnaround story still under scrutiny and two concepts Wolfe views as structurally positioned to grow.
Starbucks: Green Shoots, But Proof Still Required
Starbucks (NASDAQ:SBUX) received the most cautious treatment. Wolfe downgraded to Peer Perform without a price target, acknowledging “green shoots” from the turnaround but stating the firm wants to see evidence of sustained execution before committing to a bullish stance. Wolfe also flagged an increasingly competitive coffee landscape as a headwind.
The timing is notable. Q1 FY2026 revenue came in at $9.92 billion, up 5.5% year-over-year and ahead of estimates, while global comparable store sales grew 4% with U.S. comparable transaction growth turning positive for the first time in eight quarters. CEO Brian Niccol called the results evidence the strategy is “ahead of schedule.” Yet Non-GAAP EPS of $0.56 missed the $0.59 consensus estimate, GAAP operating margin contracted 290 basis points to 9.0%, and net income fell 62.44% year-over-year.
The broader analyst picture is mixed. The consensus target price sits at $100.44, with 13 buy ratings, 14 holds, and 4 sell or strong sell ratings. Shares are trading at $96.93 as of this morning, below the consensus target but also well below Wolfe’s prior Outperform stance. The stock is up 16.99% year-to-date, which may partly explain why Wolfe sees limited near-term upside without further proof points.
Brinker: Chili’s Has Earned Its Credibility
Brinker (NYSE:EAT) earned an upgrade to Outperform. Wolfe set a $184 price target, citing Chili’s “earned value credibility” and traffic outperformance.
The data backs that view. Chili’s has delivered 19 consecutive quarters of same-store sales growth, with Q2 FY2026 comparable sales up 8.6% and a two-year comp stack of 43%. Q2 Non-GAAP EPS of $2.87 beat the $2.63 estimate by 9.24%, and the company raised its full-year FY2026 EPS guidance to $10.45-$10.85 despite absorbing a roughly $20 million revenue hit from Winter Storm Fern. The broader analyst community is aligned: 13 buy ratings, 3 strong buys, and zero sell ratings, with a consensus target of $189.25.
Shares are trading at $129.79, down 21.86% over the past month and meaningfully below both Wolfe’s $184 target and the $189.25 consensus. Both stocks are currently trading below analyst price targets.
Wingstop: Unit Growth Conviction Offsets Comp Softness
Wingstop (NASDAQ:WING) received a fresh Outperform initiation. Wolfe set a $320 price target, pointing to best-in-class unit growth fueled by franchisees with the capital and conviction to keep building. The firm called franchisee commitment despite a softer comp backdrop “encouraging.”
Wingstop opened a record 493 net new restaurants in FY2025, reaching 3,056 locations globally with 19.2% unit growth. Domestic same-store sales declined 5.8% in Q4 2025 and 3.3% for the full year, but FY2025 Adjusted EBITDA still grew 15%. The unit economics are holding even as traffic softens. FY2026 guidance calls for flat to low-single digit domestic same-store sales growth and 15%-16% global unit expansion.
Wall Street broadly agrees with Wolfe: 20 buy ratings, 4 strong buys, and a consensus target of $325.66. Shares are at $222.20, down 14.91% over the past month, leaving a substantial gap to both Wolfe’s $320 target and the $325.66 consensus.
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