Under normal circumstances, you might think that the Supreme Court has as much to do with a quick-service restaurant (QSR) as a fry cook has to do with jurisprudence. However, restaurant stocks from Restaurant Brands (NYSE:QSR) and Chipotle Mexican Grill (NYSE:CMG) to even the likes of Wendy’s (NASDAQ:WEN), Yum Brands (NYSE:YUM), and Domino’s Pizza (NYSE:DPZ) are all suffering in Wednesday afternoon’s trading.
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What in the world could the Supreme Court do to restaurants? It’s a matter of student debt. With the possibility looming that the Supreme Court could restart federal student loan payments in late August, that’s posing some tough questions for restaurants. Student loan payments are supposed to restart in August as the result of the debt ceiling deal reached last week in Congress, though the part about potential student loan forgiveness may ultimately be declared unconstitutional.
Should that happen, and people have to start actually making payments on borrowed money, the end result will likely hit those quick-service restaurants square in the pocketbook. Already struggling under the last remnants of COVID-19-era edicts and supply chain crises—not to mention labor shortages—the potential loss of customers will only hurt restaurants further.
All five restaurant stocks were down in this afternoon’s trading, but some were better off than others. Restaurant Brands took the biggest hit, but it also has the second-smallest upside potential at 6.69%. Nevertheless, it’s still considered a Moderate Buy by analyst consensus. Meanwhile, the lightest hit, Domino’s Pizza, boasts the largest upside among the five. Also considered a Moderate Buy, it offers 16.14% upside potential thanks to its average price target of $345.45 per share.
