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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.

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Restaurant stocks have taken sharply different paths in 2026, as pressure on consumer spending has exposed a widening gap between companies that can sustain customer traffic and those struggling to protect sales. While restaurant operators face many of the same challenges, including rising costs and increasingly selective consumers, their stock market performance has been far from uniform.

According to an October 23 CNBC report, shares of Brinker International, Darden Restaurants, and Restaurant Brands International had gained approximately 32%, 18%, and 12%, respectively, since the beginning of the year. All three operate multiple restaurant brands. In contrast, several companies built around a single major chain, including McDonald’s, Chipotle, and CAVA, had recorded share price declines.

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The divergence has raised questions about whether operating multiple brands provides an advantage when consumers become more cautious about dining out. However, recent earnings suggest that brand execution, menu pricing, and customer traffic remain just as important as portfolio diversification. However, the industry has brought forth contrasting results, which show that restaurant stocks cannot be evaluated solely on their exposure to consumer spending. Some operators are expanding successfully despite industry pressures, while others face declining restaurant traffic and tighter profitability.

These differences are particularly important for investors evaluating restaurant stocks with substantial analyst-implied upside. A large gap between a company’s current share price and analysts’ price targets may indicate expectations of a recovery or continued growth, but those expectations must be assessed against the company’s actual financial performance. For more insight into the sector, access our meticulously compiled list of the 10 Most Profitable Stocks of the Past 5 Years here for free.

Restaurant traffic, comparable sales, operating margins, and expansion plans provide important evidence for evaluating whether those targets are supported by recent results. Against this backdrop, hedge fund ownership offers another perspective on which restaurant companies have attracted institutional investment interest.

Our Methodology

We compiled a list of the best restaurant stocks that analysts are bullish on and shortlisted the ones with the highest hedge fund holdings, using the data from Insider Monkey’s extensive hedge fund database. The stocks are arranged in ascending order of their analyst upside.

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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).

10 Best Restaurant Stocks with the Highest Upside

10. Papa John’s International, Inc. (NASDAQ:PZZA)

Analyst Upside: 14.64%

Number of Hedge Fund Holders: 38

Papa John’s International, Inc. remains focused on restoring sales growth as weaker demand and competition weigh on its North American restaurant network. The company’s third-quarter 2026 results showed North American comparable sales declining 8.3%, while global systemwide restaurant sales fell 5.6% excluding foreign exchange effects. Total company revenue decreased 10.5% to $454.8 million, with Papa John’s attributing the decline to the refranchising transactions and lower performance in North America.

Adjusted EBITDA declined to $38.1 million, reflecting a $9.7 million drop from the prior-year period. Meanwhile, adjusted diluted earnings per share fell to $0.16 from $0.32. Management has introduced its Unbox Better strategy, targeting improvements in food quality, customer value, restaurant execution, and marketing. The company is also increasing its emphasis on local marketing investment by franchisees.

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The investment case depends on whether these operational changes can reverse declining comparable sales and support profitability. Although refranchising changes the company’s revenue composition, the weakness in North American customer demand remains an important challenge that has yet to be resolved.

9. Bloomin’ Brands, Inc. (NASDAQ:BLMN)

Analyst Upside: 17.30%

Number of Hedge Fund Holders: 33

Bloomin’ Brands, Inc. is working to improve performance across its restaurant portfolio, particularly at Outback Steakhouse. Unlike some of the industry’s faster-growing chains, its investment case currently centers on operational improvements and restoring consistent profitability.

The company’s third-quarter 2026 results showed revenue increasing 1.7% to $944.3 million. Comparable sales rose 1.9% at Outback Steakhouse, 0.6% at Carrabba’s Italian Grill, and 5.3% at Bonefish Grill. However, adjusted diluted loss per share widened to $0.17 from $0.03 a year earlier.

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The distinction between reported and underlying performance is significant for investors to note. Third-quarter revenue included $13.2 million associated with a change in the accounting estimate for gift card breakage. While reported restaurant-level operating margin improved, adjusted restaurant-level operating margin declined from 9.5% to 9.3%.

Management nevertheless raised its full-year adjusted earnings guidance to $0.97–$1.02 per share and reported continued improvements in guest scores at Outback. Bloomin’ Brands therefore offers investors an operational turnaround to evaluate, rather than an established period of accelerating earnings growth. Sustained improvements in restaurant traffic, operating efficiency, and adjusted margins remain central to assessing the company’s progress.

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