Restaurant stocks are back on the menu as the reopening trade picks up steam.
Matt Maley, chief market strategist at Miller Tabak, agreed with Atlantic Equities on one of those names.
“The rally since last summer has been spectacular. The problem is that basically all of them are getting quite overbought. That probably means they’ll take a bit of a breather and then move a lot higher, but there is one exception. There’s one stock that is not highly overbought, and that’s Starbucks,” Maley told CNBC’s “Trading Nation” on Tuesday.
Maley said Starbucks took a hit announcing its earnings in January but has since broken out to a higher high.
“This is one that has more upside movement to a group that should do well throughout the rest of the spring and summer,” he said. “I want to have the one that has the most upside. For me, right now, that’s Starbucks.”
Starbucks shares have rallied 4% this week but have underperformed the S&P 500 this year, adding 6% versus the broader market’s nearly 9% gain.
Steve Chiavarone, portfolio manager at Federated Hermes, broke down the renewed appetite for these stocks on Tuesday.
“Humans haven’t changed. We’re still social, we want to go back out, and we’re going to,” he said during the same interview. “Consumers are sitting on roughly $3 trillion of excess savings. … We expect that consumers are going to refocus a lot of their wallet here, away from your home goods and spending on their homes back towards experiences, and that’s going to include restaurants, and casinos and hotels and things of that nature.”