Evercore ISI’s David Palmer explains why he’s watching the casual dining space heading into 2026

PAY OFF THESE STUDENT LOANS.

GUYS.

>> IT'S GOING TO BE AN INTERESTING FIRST HALF. BETWEEN

THAT AND SOME OF THE TAILWINDS WE'RE GOING TO GET ON THE MACRO FRONT, EMILY. THANK YOU, EMILY

FRONT, EMILY. THANK YOU, EMILY WILKINS. IT HAS BEEN A CHOPPY

WILKINS. IT HAS BEEN A CHOPPY YEAR FOR THE RESTAURANT BUSINESS. AND THE FOOD INDUSTRY

BUSINESS. AND THE FOOD INDUSTRY HAS HIGH HOPES. EARLY IN THE YEAR WERE DASHED BY SOME WEAK CONSUMER SENTIMENT AND THE COST OF TARIFFS, VALUE DEALS AND DISCOUNT CAMPAIGNS HAVE HELPED TURN SOME BRANDS AROUND, BUT MANY ARE STILL STRUGGLING. HERE

TO DISCUSS WHAT TO WATCH FOR IN THE NEXT YEAR IS DAVID PALMER, SENIOR MANAGING DIRECTOR AT EVERCORE ISI. DAVID, GOOD TO

EVERCORE ISI. DAVID, GOOD TO SEE YOU. HAPPY HOLIDAYS.

SEE YOU. HAPPY HOLIDAYS.

>> THANK YOU. HAPPY HOLIDAYS TO YOU.

>> IS THIS DOES THIS ALL ROTATE AROUND COMMODITY INFLATION? IS

THAT BASICALLY THE BOTTOM LINE.

>> AND THAT'S GOING TO BE ONE FACTOR. YOU SEE THAT CERTAINLY

FACTOR. YOU SEE THAT CERTAINLY WITH THE COMPANY OPERATING GUYS, THE FAST CASUAL NAMES LIKE CHIPOTLE BUT PARTICULARLY THE STEAK PLAYERS LIKE TEXAS ROADHOUSE. PEOPLE ARE GOING TO

ROADHOUSE. PEOPLE ARE GOING TO BE THINKING ABOUT BEEF PRICES.

WHEN WILL THOSE COME OFF THE TOP? IT LOOKS LIKE THERE'S

TOP? IT LOOKS LIKE THERE'S ALREADY SOME SIGNS OF DEMAND DESTRUCTION IN SUPERMARKETS, WHICH SHOULD HELP. MAYBE THE

HELP THE YEAR END BETTER FOR NAMES LIKE TEXAS ROADHOUSE, BUT ALSO DARDEN THAT PAY A LOT IN TERMS OF BEEF. BUT IT'S REALLY GOING TO COME DOWN TO WHAT YOU TEED UP IN THE IN THAT PREVIOUS

SEGMENT, WHICH IS WHAT IT'S GOING TO BE THE NET EFFECT TO THE MIDDLE INCOME CONSUMER FROM ALL OF THESE THINGS. AND

CLEARLY, THERE'S SOME PEOPLE MOTIVATED TO GET THE CONSUMER IN THE GAME HERE. BY BASICALLY

THE SECOND QUARTER OF 26.

>> RIGHT. WHAT ARE SOME OF YOUR FAVORITES FOR 26?

>> YEAH. WELL RIGHT NOW THE DINING SPACE LOOKS GOOD. SOME

OF THOSE FACTORS THAT WE TALKED ABOUT NET OF GLP ONE WHICH SHOULD BE A HEADWIND. YOU

MENTIONED STUDENT LOANS. SOME

OF THOSE THINGS MIGHT BE MORE OF A HEADWIND TO THE FAST FOOD SPACE. BUT CASUAL DINING WHICH

SPACE. BUT CASUAL DINING WHICH IS MORE OF A TREAT, DOESN'T SEEM TO BE AS AFFECTED BY SOME OF THOSE NEGATIVES, BUT ALSO HAS THE BENEFIT OF THE EARLY TAX RELIEF THAT WE'RE GOING TO

SEE. SO A NAME LIKE BRINKER,

SEE. SO A NAME LIKE BRINKER, FOR EXAMPLE, THAT'S EXECUTING WELL, IS PLAYING WELL IN VALUE.

WE LIKE THAT NAME DARDEN. WE

LIKE AS WELL. SO THOSE ARE THAT'S A GREAT STARTING POINT.

AND THEN THERE'S GOING TO BE SOME VALUE PLAYERS THAT