U.S. stocks moved slightly higher in early morning trading Tuesday, shortly after the 10-year Treasury yield pulled back from the seven-year high it touched after bond markets reopened today. One of the morning’s strongest groups was retail restaurants, which saw several notable gainers amid technical strength and takeover chatter.
Shares of embattled pizza chain Papa John’s (PZZA – Free Report) were up as much as 7% in early trading following a Wall Street Journal report that indicated Trian Fund Management is considering a bid for the company. Trian is an activist hedge fund and already has exposure to the quick-serve food business with its 13% stake in Wendy’s (WEN – Free Report) .
The activist firm reportedly contacted Papa John’s to gather information for a potential bid. However, the Journal cautioned that there is “no guarantee” Papa John’s will be sold or that Trian will even follow through with an offer.
Papa John’s has struggled to generate momentum recently as it has faced slumping same-store sales and controversy. The pizza delivery giant’s founder and namesake John Schnatter resigned from his role as chairman in July after admitting to using a racial slur on a conference call.
Since then, Schnatter and Papa John’s have been locked in a public feud. The former executive remains on the board and owns about 30% of the company. According to the WSJ, Schnatter had engaged in takeover talks with Wendy’s prior to his resignation.
Elsewhere, shares of Starbucks (SBUX – Free Report) were surging as investors reacted favorably to the appointment of Patrick Grismer as CFO and executive vice president. Grismer has served as the CFO of Hyatt (H – Free Report) since 2016. He will replace Scott Maw, who is set to retire in November after seven years with the coffee behemoth.
Starbucks announced the move yesterday, inspiring a move of about +1.4% during the session. Wall Street continued that momentum in early trading Tuesday, quickly lifting the stock to an intraday high of $58.89 per share.
Another restaurant stock showing strength on Tuesday morning was McDonald’s (MCD – Free Report) . Shares of the fast-food burger chain peaked at $169.98 shortly after the open, marking a gain of about 1.3% from its Monday close.
McDonald’s has witnessed inconsistent trading over the past six months, but the stock has now added nearly 7% since mid-September. Investors will be hoping this move marks the start of a longer-term breakout for the company.
We are expecting MCD’s next earnings report before the opening bell on October 23. Profits for the quarter are expected to be $1.99 per share, according to our latest Zacks Consensus Estimates. That would represent year-over-year growth of 13.1%.
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