One for the Watch List - Kura SushiKura Sushi may be setting up for a double bottom bounce from 18.50. The stock is very close to oversold on the hourly chart. A price of 18.50 or an RSI of 25 on the hourly chart would be a great entry signal. A decisive break below 18.50, however, would signal a downward breakout and further downside ahead for the stock.
With a P/E around 100, Kura Sushi is probably overvalued (as IPOs often tend to be). However, the company has a sexy business model that combines food and interactive technology, and last quarter its earnings grew 80% year over year. Kura's restaurants are always packed, and with the influx of IPO investment I think the company will quickly scale.
The average analyst price target for Kura Sushi jumped from about $20 per share last month to about $30 per share this month, implying about 62% upside from the current price. All analysts who cover the stock have rated it a buy. There are only a few analysts who currently cover Kura Sushi, so the average price target could change radically as more analysts add coverage. New analyst ratings will act as catalysts for the stock.
For the long-term buy and hold investor, I'd be patient and look for an entry at a more attractive P/E, perhaps near the all-time low of 15.05. But for near- and medium-term traders, I think there's potential here to swing a bounce.
Restaurant
Del Frisco's remains a buy pre-earnings Still too cheap with pending earnings release, potential with bartaco and barcelona wine bar, new activist investor on the board, plenty of buyout rumors.
October 24 Earnings: McDonalds - The Rise Of The WageMcDonald's comparable sales will be aided by continued investments and menu innovation.
Alongside above mentioned factors, its international presence with a softer USD will aid overall margins.
However, with rising wage growth and soft quarterly restaurant spending globally, I expect profits to be under pressure.
Guidance should underwhelm with the aforementioned factors.
I am starting McDonald's with a $150 PT for the post-earnings move.
A tight stop well over ATH at $170 is advised.
CMG: A shortI am bearish on CMG in a short term sense. Story/fundamental/technical wise
Technical: The price has breached the 200 Weekly SMA and shows weak price action. I am expecting a drop but I am unsure where it stops.
Fundamentals: CMG is over valued and based on classical valuation based on DCF, CMG's fair value is at $288. Which is a big drop. In terms of PE and PS it is undervalued as well. However, since it is a growth stocks and it assumed that earnings are used for growth, EV/EBITDA still shows decent valuation of 14
Story wise: Many would have known about the e coli scare and causes a drop on stores sales. Though as a food scientist this food scare is actually very small. However, due to fear (funny enough from wall street) the stock may see further decline.
For short term players CMG is a good short but once there is a good time I will get long since it is a favourable food restaurant and also have big room for growth.