To-Go Baby Back Ribs Boost Casual Dining Outlook By Investing.com

By Christiana Sciaudone

Investing.com — At-home baby back ribs are here to stay.

Morgan Stanley (NYSE:MS) named Brinker International Inc (NYSE:EAT), owner of Chili’s, among the biggest casual dining beneficiaries of the continued to-go habit we picked up over the past year. Analyst John Glass raised the price target on Brinker to $64 from $60. He also boosted Texas Roadhouse Inc (NASDAQ:TXRH) to $90 from $87 and Bloomin Brands Inc (NASDAQ:BLMN) to $28 from $25.

The analyst also likes Olive Garden owner Darden Restaurants Inc (NYSE:DRI), but declined to mess with its price target.

Brinker rose 5.5%, Bloomin’ Brands 2.9% and Darden almost 2% in trading Friday. Texas Roadhouse was little changed.

To-go sales at full service restaurants (pickup and delivery) grew two to three times during the pandemic with dining rooms closed or restricted, Morgan Stanley said. Off premise eating has risen on average from 10% to 15% pre-Covid to 20% to 40% as a percent of sales as of the fourth quarter.

Darden is expected to also have a better dine-in business post-Covid, on top of continued strong to-go sales. Shares of Darden are up about 170% over the past 12 months as profit and sales have steadily recovered since the quarter ended May 2020. Brinker, meanwhile, is up more than 560% in that time.