10 Best Restaurant Stocks with Highest Upside

We look at 10 restaurant stocks with the highest analyst-implied upside potential amid shifting consumer spending and uneven industry performance.

8. Yum China Holdings, Inc. (NYSE:YUMC)

Analyst Upside: 24.39%

Number of Hedge Fund Holders: 35

Yum China Holdings, Inc. (NYSE:YUMC) has continued expanding its restaurant network while improving operating profitability, even as existing-store sales remain under pressure. The operator of KFC and Pizza Hut restaurants in China has increasingly relied on store expansion, operational efficiencies, and greater franchise participation to support its business.

According to its third-quarter 2026 earnings release, revenue increased 8% to approximately $3.5 billion, although growth excluding foreign exchange effects was 2%. Operating profit rose 13% to $451 million, and operating margin expanded by 50 basis points year over year to 13%.

DON’T MISS: 10 Cheapest AI Data Center Stocks to Buy According to Billionaires

The company opened a record 692 net new stores during the quarter, taking its network to 19,989 locations, with franchisees accounting for 44% of net new openings. Yum China has also maintained a substantial shareholder-return program. It returned $1.08 billion through dividends and share repurchases during the first nine months of 2026. The combination of restaurant expansion, improving profitability, and capital returns supports its investment case, although weaker spending at established locations remains a challenge.

7. BJ’s Restaurants, Inc. (NASDAQ:BJRI)

Analyst Upside: 32.98%

Number of Hedge Fund Holders: 24

BJ’s Restaurants, Inc. has delivered one of the more notable improvements in customer traffic among casual dining operators. Unlike restaurant companies relying primarily on menu price increases to support sales, BJ’s reported approximately 8% growth in both comparable restaurant sales and traffic during the third quarter of 2026.

The company’s November 5 earnings release showed an 8.1% increase in comparable restaurant sales, contributing to an 8.6% rise in total revenue to $358.6 million. Restaurant-level operating profit increased 27.9% to $52.9 million, while its corresponding margin improved from 12.5% to 14.7%. This indicates that higher restaurant volumes translated into stronger operating profitability rather than being entirely absorbed by expenses.

READ ALSO: 10 Stocks With Easy 15-38% Gains

Management also raised its fiscal 2026 guidance, increasing its adjusted EBITDA forecast to between $149 million and $154 million. The company operates 219 restaurants and is concentrating on menu innovation, customer experience, and improving restaurant productivity.

BJ’s investment case is supported by measurable improvements in both sales and margins. Maintaining these gains as consumer spending patterns change remains important, particularly because full-service dining businesses continue to face labor and operating cost pressures.

6. CAVA Group, Inc. (NYSE:CAVA)

Analyst Upside: 33.78%

Number of Hedge Fund Holders: 37

CAVA Group, Inc. (NYSE:CAVA) continues to generate substantial revenue growth through restaurant expansion, but its latest financial results illustrate the increasing importance of profitability as the chain becomes larger.

During the third quarter of fiscal 2026, revenue increased 22.1% to $353.7 million, supported primarily by restaurant openings and a 3.1% increase in same-restaurant sales. CAVA opened 24 net new locations, reaching 500 restaurants and reflecting a 20.5% growth in total CAVA restaurants year over year. However, almost all comparable-sales growth came from menu pricing and product mix, with guest traffic improving only slightly.

READ ALSO: 10 Best Cybersecurity Stocks to Buy: Picked By Hedge Funds

Meanwhile, restaurant-level profit increased 16.2% to $82.7 million, but its margin declined by 120 basis points to 23.4%. The company attributed this pressure partly to labor investments, delivery costs, and restaurant maintenance. Net income also declined to $13.2 million from $14.7 million a year earlier. Management updated its full-year outlook to 76–78 net new restaurant openings and same-restaurant sales of 6%–7%.

CAVA’s continued expansion and positive restaurant-level profitability remain central to its investment appeal. However, the divergence between revenue growth and earnings growth means investors must distinguish the benefits of a larger restaurant footprint from improvements in profitability at individual locations.

5. Brinker International, Inc. (NYSE:EAT)

Analyst Upside: 34.51%

Number of Hedge Fund Holders: 48

Brinker International, Inc. (NYSE:EAT) has emerged as one of the stronger performers in casual dining, supported by sustained sales growth at Chili’s. Its latest results demonstrate how improvements in customer demand and restaurant operations can strengthen profitability despite broader pressure on consumer spending.

In the first quarter of fiscal 2027, Chili’s comparable sales increased 10.1%, marking the chain’s 22nd consecutive quarter of comparable-sales growth. Brinker reported total company sales of $1.46 billion in fiscal Q1 2027, compared with $1.33 billion a year earlier, while operating income rose to $151 million from $117.9 million.

READ NOW: 10 Dividend Stocks with the Highest Yield

Importantly, restaurant operating margin expanded to 17.7% from 16.2%, indicating that sales growth was accompanied by improved operating profitability. However, performance across Brinker’s brands was uneven, with Maggiano’s comparable sales declining 3.4%. Also read our list of the 10 Best Dividend Stocks with Monthly Payout to make an informed investment decision.

Management raised its fiscal 2027 revenue guidance to $6.23 billion–$6.33 billion, although the forecast includes an additional operating week. Chili’s continued ability to attract customers provides a measurable foundation for Brinker’s earnings performance. Nevertheless, the difference between Chili’s growth and Maggiano’s weaker sales demonstrates that the benefits of a multi-brand business ultimately depend on how its individual restaurants perform.

READ NEXT: Jim Cramer is Bullish on These 10 Stocks