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If you happened to read our “6 Investment Themes for 2026” report, which we published around Christmas time last year, you may recall a theme that we thought could see some activity in the new year (theme #3, p. 11 of that report).

That theme centered on restaurants attracting buyers' interest in 2026 due to their beaten-down valuations and a period where rising costs eroded profits. Because of the surge in costs, these companies have seen their stock prices plummet over the last year.

We analyzed the returns performance of 45 restaurant stocks that trade on the U.S. exchanges to understand just how beaten down they are. Only 12 of them have had a positive return (33 negative), with the average being down 25% over the last 12 months (median being -32%).

Makes for a target-rich environment for PE funds or strategics looking to snag a brand on the “cheap” if they believe they can extract synergies or just play the waiting game for a consumer rebound.

That’s where this opportunity comes in, and we think it’s an interesting one given that sharks are circling and a potential bidding war could take place to buy this asset.

If the rumors are true, then this special situation with a potential return in excess of 25% for a looming announcement any day now is worth taking a look at.

With that, let’s get into it.

Disclaimer: We do have a position in the name discussed below at the time of publishing this article.

If you would like to see our past work, click here to access our table of contents.