Fast Food Will See Same-store Sales Growth In 2016, Casual Dining To Remain Flat, Says RBC Capital

The fast-food industry will outperform the casual dining sector, with large companies benefiting from digital and advertising advantages, according to RBC Capital Markets' Restaurants 2016 Outlook report. Value will also be a differentiator: Wendy's Co. has put a "4 for $4" deal in place that has pushed up same-store sales in the fourth quarter, RBC's report said. The bank expects fast-food industry same-store sales growth of 2% to 3% next year, in line with 2015, while the fast-casual dining industry is expected to be flat. RBC increased price targets for McDonald's Corp. to $130 from $125; for Wendy's to $12 from $11; and for Yum Brands Inc. to $90 from $87. It cut price targets for Restaurant Brands International Inc. to $42 from $44; for Darden Restaurants Inc. to $62 from $74; for Bojangles Inc. to $20 from $23; and for Noodles & Co. to $12 from $13.