In this article, we will take a look at the 7 best restaurant stocks to buy for growth in 2026.
2024 was a challenging year for the restaurant industry, which struggled under inflation and reduced discretionary spending. The industry did a great job of turning it around in 2025 by carrying out menu changes and cashing in on a healthier spending appetite of the general public. 2026 is about to test that turnaround for more reasons than one.
Earlier this year, the US Department of Agriculture released its 2026 price outlook for the food industry. One thing to note in that outlook was that the prices of products relied on by the takeaway and dine-out industry were expected to increase by nearly 5%.
Beef prices offer an interesting example. They are expected to rise by 9.4% in 2026. Add to this rising inflation, reduced disposable income, and expensive restaurant food, and restaurants will face a whole new challenge.
According to a McKinsey & Company report on the industry, more than half of the spending on food and beverages in the USA is away from home. This is positive, but could change as prices rise. Breakfast habits already point to this shift as people stop spending in the earlier part of the day, according to the report:
The sharpest shift, however, is happening at breakfast, once the hottest growth area for restaurant operators. In both FSRs and LSRs, breakfast-spending growth now lags behind all other dayparts. When consumers feel their budgets are pinched, they tend to cut back on breakfast spending, since it is often seen as a more discretionary dining category.
Even in this uncertain environment, some restaurants are expected to grow their topline. We decided to create a list of the best restaurant stocks to buy for growth in 2026.
Our Methodology
To come up with our list of 7 best restaurant stocks to buy for growth in 2026, we only considered stocks in the restaurant industry with a market cap of at least $2 billion. We then looked at their expected revenue growth rate for 2026 and filtered out companies with growth rates of at least 10%. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds and are listed in ascending order of the number of hedge funds holding them in their portfolios.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Note: All share price data in the article is as per market close on March 23.
7. CAVA Group, Inc. (NYSE:CAVA)
On March 16, JP Morgan’s John Ivankoe maintained his Buy rating on the CAVA Group, Inc. (NYSE:CAVA) stock, along with a price target of $80. This is below the stock’s current market price. Sara Senatore of the Bank of America Securities has a higher price target of $95, which she reiterated on March 11. This also happens to be the highest price target on Wall Street, offering 13% upside from here.
These updates come after the company’s Q4 2025 results announced on February 24. Despite pressure on margins, which will likely worsen given higher oil prices and resulting inflation, management is planning 74 to 76 new restaurant openings in 2026. While the management does not plan any price increases in its menu, this was said before oil prices took off at the end of February.
Apart from the new markets being targeted, the company also announced the addition of its first-ever seafood offering: Pomegranate-glazed Salmon. The item is expected to be available in restaurants by the end of Q1 2026. The new item is also expected to put pressure on the company’s margins in the short term.
CAVA Group, Inc. is an operator and owner of a chain of restaurants under the CAVA brand across the United States. The company also offers spreads, dips, and dressings through grocery stores, as well as online and mobile ordering platforms.
6. Shake Shack Inc. (NYSE:SHAK)
On March 6, Matt Curtis of DA Davidson initiated coverage of Shake Shack Inc. (NYSE:SHAK), assigning a price target of $125 and a Buy rating. This price target reflects an upside of 42.5%. Interestingly, this stance is the opposite of that of Bank of America Securities, which reiterated its Sell rating on the stock the same day, with a price target of $88.
The company reported its Q4 2025 earnings on February 26, growing its topline by 15% and opening 45 new company-operated Shake Shack branches. The management noted that operational improvements have reduced customer wait times from around 7 minutes two years ago to under 6 minutes. Supply chain diversification is also expected to impact the company positively, as the management pointed out:
We accelerated supply chain initiatives focused on diversification and logistics… These structural improvements enhanced our resilience, improved purchasing leverage and helped mitigate inflationary pressure without taking outsized price increases.
The company also highlighted how new items like the Dubai Chocolate Shake, fried pickles, and onion rings were driving customer engagement. Going forward, management expects to open 55 to 60 new company-operated locations.
Shake Shack Inc. is an operator, owner, and licensor of Shake Shack restaurants (Shacks). The company operates across the United States and the world. Its restaurants offer hot dogs, burgers, shakes, wine, chicken, beer, crinkle-cut fries, frozen custard, and more.
5. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Texas Roadhouse, Inc. (NASDAQ:TXRH) is covered by 18 analysts on Wall Street, with an average price target of $197.6. While this does not offer significant upside, the two most recent analyst ratings are much more bullish on the stock. Bank of America Securities reiterated its Buy rating on TXRH on March 11, along with the price target of $216. On 5th March, TD Cowen analyst Andrew Charles had also assigned a $215 price target to the stock. These targets suggest more than 25% upside, reflecting recent positive sentiment about the company’s business.
This sentiment was not as bullish before the earnings announcement on February 19. Mizuho Securities had warned that beef prices could remain high through at least 2027. According to the analyst, it could put pressure on the company’s profit margin and earnings estimates. The firm believes that higher input costs could limit further expansion in the stock’s valuation.
The comments on the beef prices were also confirmed by the management on the TXRH earnings call:
Our commodity inflation guidance of approximately 7% remains unchanged, with the continued expectation of being above the guidance in the first half of the year and below the guidance in the second half of the year. Beef inflation accounts for nearly all of the expected commodity inflation throughout the year.
Texas Roadhouse, Inc. is an operator of casual dining restaurants across the United States and globally. The company operates in the Bubba’s 33, Texas Roadhouse, and Other segments. It also franchises and operates restaurants under the Jaggers, Bubba’s 33, and Texas Roadhouse brands.
4. Yum! Brands, Inc. (NYSE:YUM)
On March 20, Andrew Charles of TD Cower reiterated his $180 price target on the Yum! Brands, Inc. (NYSE:YUM) stock, along with the Buy rating. The analyst is optimistic about the company’s strong marketing plans and menu innovation. He expressed these views after a meeting with the company’s management.
Andrew believes Taco Bell is the company’s most prized brand and is on track to achieve an average annual unit volume of $3 million by 2030. The company has previously forecast that its beverage segment will become a $5 billion business by 2030. Currently, it stands at around $2.75 billion, so the growth forecast is quite impressive. Here’s what the analyst said about the company’s beverage plans:
Our math suggests a burgeoning and on-trend iced coffee and energy business will grow to $1.2 billion within the 2030 forecast. The target is expected to be reached via a two-pronged strategy, namely Live Mas Cafes within Taco Bell restaurants and exporting strong performing items from the cafes to the overall system.
After reviewing the company’s fourth-quarter results, Bank of America Securities slightly lowered its earnings estimates because it now projects higher expenses at Pizza Hut. Even though it lowered its estimates, BofA still increased its price target from $173 to $178 due to a higher overall market valuation multiple.
Yum! Brands, Inc. is a developer, franchiser, and operator of quick-service restaurants. The company operates in the Pizza Hut Division, KFC Division, Habit Burger & Grill Division, and Taco Bell Division. It was founded in 1997 and is based in Louisville, Kentucky.
3. Wingstop Inc. (NASDAQ:WING)
On March 12, Sara Senatore of Bank of America Securities reiterated her Buy rating on Wingstop Inc. (NASDAQ:WING), setting a price target of $356. This reflects an almost 90% upside from here on. Other analysts are similarly bullish on the stock, even though macroeconomic uncertainties remain. The most bullish analyst, Peter Saleh of BTIG, has a $400 price target on the stock.
According to TD Cowen’s report after WING’s Q4 earnings last month, same-store sales are likely to decline by 0.5% in 2026. It must be added, though, that TD Cowen is one of the most bearish analysts so far, out of the 33 analysts covering the stock. TD Cowen’s survey data shows that the company’s core customers are facing increasing pressure. The firm said that the potential benefits in 2026 from loyalty programs, smart kitchens, and the FIFA World Cup will not be enough to overcome the challenges impacting the brand’s main customer base.
Wingstop Inc. is an operator and franchisor of restaurants under the Wingstop brand. The company operates its restaurants across the United States, Kuwait, Saudi Arabia, Australia, Puerto Rico, Bahrain, and the Netherlands. It was incorporated in 1994 and is based in Dallas, Texas.
2. Dutch Bros Inc. (NYSE:BROS)
On March 13, Stifel Nicolaus analyst Chris O-Cull set a price target of $75 for Dutch Bros Inc. (NYSE:BROS), maintaining his Buy rating. On March 9, Margaret-May Binshtok of Wolfe Research initiated coverage of the stock, assigning an Outperform rating and a $77 price target. The analyst expects mid-teen percentage unit growth with enough strength to continue momentum well into 2026.
A recent report published by the Wall Street Journal on March 1 talked about how the company is attracting a younger audience by focusing on cold energy drinks. Known primarily for selling coffee as the third-largest coffee chain in the US, BROS is looking to reduce its reliance on the beverage. Interestingly, 90% of the company’s coffee sales come from cold coffee drinks, reflecting what company management claims is the trend among youngsters. Tana Davila, the chief marketing officer, confirmed the company’s approach of targeting the younger generation’s love for cold drinks by saying:
The market is moving that way, and that is the core to what we do.
Dutch Bros Inc. is an operator and franchiser of drive-thru shops. It distributes and sells coffee-related products, coffee, and accessories. The company operates in the Company-Operated Shops & Franchising and Other segments. Dutch Bros was incorporated in 1992 and is headquartered in Tempe, Arizona.
1. Chipotle Mexican Grill, Inc. (NYSE:CMG)
On March 20, TD Cowen analyst Andrew Charles maintained his $44 price target on Chipotle Mexican Grill, Inc. (NYSE:CMG) and reiterated his Buy rating. This is close to the average price target on CMG of $45.39, according to ratings from 27 different analysts.
When analysts originally raised the CMG price target to $44, they stated that the company was on track to achieve its Q1 2026 and full-year same-store sales guidance. The lack of stock performance and fundamental issues with the company were not related to its own operations and were rather due to industry-wide challenges.
Other analysts are more bullish on the stock. For instance, DA Davidon recently initiated coverage of the CMG stock with a price target of $51. The firm believes the company will easily be able to beat Wall Street estimates over the next two years. Once the company gets on track to deliver this performance, valuation multiple expansion could bring increasing reward for patient investors.
Chipotle Mexican Grill, Inc. is an operator and owner of Chipotle Mexican Grill restaurants. The company sells beverages and foods, including quesadillas, salads, burritos, tacos, and burrito bowls. It operates in the United States, France, the United Kingdom, Germany, and Canada.
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