Bank of America Securities analyst Sara Senatore explained that while the restaurant industry may seem simple due to its familiarity with consumers, investing in restaurant stocks remains complex, given the wide performance variation within the sector.

According to Senatore, in today's value-conscious environment, the restaurants seeing success are those offering standout products and experiences across multiple dimensions.

This consistent execution has allowed leading quick-service pizza chains to expand market share, and she highlights that Domino's Pizza Inc (DPZ  ) is positioned to continue outperforming, backed by its partnerships with delivery platforms like DoorDash, Inc. (DASH  ) and Uber Technologies, Inc.'s (UBER  ) UberEats, value-oriented menu strategies, and technological strength. The analyst reiterated the Buy rating on Domino's, with a price forecast of $549.

The analyst expressed optimism about Papa John's International, Inc (PZZA  ), anticipating an improved earnings profile after the company's planned investments in 2025. Senatore reiterated the Buy rating, with a price forecast of $52.

Senatore noted that Yum! Brands, Inc. (YUM  ), the parent company of Pizza Hut, has maintained stable returns on assets compared to the broader market, and she views the company's historical performance range as a solid basis for future estimates. The analyst reiterated the Neutral rating with a price forecast of $159.

Senatore highlighted market share dynamics among these top three pizza chains, noting that Domino's has continued to gain share, Papa Johns has maintained its position, while Pizza Hut has seen a decline in share.

Out of the Pizza focus, the analyst sees Bloomin' Brands, Inc. (BLMN  ) 's same-store sales growth could be slower than expected if macro headwinds pressure restaurant consumption or sales-driving initiatives fail to resonate with customers. Senatore reiterated the company's Underperform rating, with a price forecast of $7.

Senatore noted that McDonald's Corporation (MCD  ) could deliver better-than-expected margins and returns if it slows down its investment pace or uncovers unanticipated cost savings.

She also suggested that if investor sentiment turns more risk-averse, McDonald's defensive profile could become increasingly appealing in the current market environment. The analyst reiterated the Neutral rating on McDonald's with a price forecast of $327.