What Happened?

A number of stocks fell in the afternoon session after crude oil prices surged past $100 per barrel due to geopolitical conflict, sparking concerns over rising operational costs and a potential decline in consumer spending. 

The spike in oil prices triggered anxiety across the food service industry, which relies heavily on commercial Liquefied Petroleum Gas (LPG) for daily operations. Analysts warned that energy supply chains were vulnerable, and any disruption could lead to higher fuel costs for restaurants, squeezing already thin profit margins. At the same time, rising gasoline prices threatened to reduce consumer discretionary spending.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Sit-Down Dining company Dine Brands (NYSE: DIN) fell 4.3%. Is now the time to buy Dine Brands? Access our full analysis report here, it’s free.
• Modern Fast Food company Wingstop (NASDAQ: WING) fell 5.6%. Is now the time to buy Wingstop? Access our full analysis report here, it’s free.
• Traditional Fast Food company Dutch Bros (NYSE: BROS) fell 5.4%. Is now the time to buy Dutch Bros? Access our full analysis report here, it’s free.
• Sit-Down Dining company First Watch (NASDAQ: FWRG) fell 6.1%. Is now the time to buy First Watch? Access our full analysis report here, it’s free.
• Traditional Fast Food company Jack in the Box (NASDAQ: JACK) fell 2.8%. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free.

Zooming In On First Watch (FWRG)

First Watch’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 6.7% on the news that Wall Street analysts affirmed a "Strong Buy" consensus rating on the stock. The positive sentiment came from a group of 10 analysts who collectively set a price target of $20.40 for the company. This strong backing from market experts appeared to have boosted investor confidence, leading to the stock's rise.

First Watch is down 24% since the beginning of the year, and at $11.68 per share, it is trading 41.9% below its 52-week high of $20.09 from April 2025. Investors who bought $1,000 worth of First Watch’s shares at the IPO in September 2021 would now be looking at an investment worth $527.79.

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