Investors looking for one of the biggest bargains in the downtrodden market should look no further than casual dining, according to Jefferies. Rising inflation and worries of a recession have driven shares of many casual dining stocks downward. But the dip may be over for now as the consumer is proving more resilient than anticipated, according to the firm. “We think Casual Dining represents the best risk/reward, with valuations already cut in half … and our scenario analysis suggests risk to EBITDA less than feared,” wrote analyst Andy Barish in a note to clients. “Importantly, the consumer is proving more resilient & capacity backdrop dramatically more favorable, supporting more staple-like outcome in downturn, and opportunity for ongoing recovery in share gains.” Quick service restaurants and fast-casual dining stocks have plummeted 22% and 38%, respectively, from their 2021 peaks, according to Jefferies. As of late, companies have grappled with higher food and labor costs eating into margins, though many chains have responded with price increases for consumers. While the outlook seems troublesome, the downside to sales and margins won’t come close to what was seen during the Great Recession, according to Jefferies. On the other hand, consumer spending persists, and some believe that will likely continue in the near term, including Bank of America CEO Brian Moynihan . “What’s going to slow them down? Nothing right now,” he told Bloomberg Television during an appearance from Davos, Switzerland this week. Moynihan said the consumer is “in good shape” and the bank’s customers have spent 10% more so far this month than the same period last year. A bet on restaurants Among its top picks to play the casual dining market, Jefferies named restaurant and entertainment chain Dave & Buster’s . In April, the firm called out the stock as one of the consumer discretionary names that could benefit even in a prolonged slowdown . The company is “well positioned to capitalize on latent consumer demand for services/experiences and is most insulated among company owned models from inflationary headwinds given amusements/games business,” Barish wrote in an April note. Shares of Dave and Buster’s have dropped nearly 13% this year, but shares could nearly double from Tuesday’s close price, based on Jefferies’ $60 12-month price target. Cheesecake Factory , whose shares have fallen about 21% this year, also made Jefferies’ cut. In a base-case scenario suggesting a 2025 recovery, Jefferies forecasts 88% upside for the stock. Near-term, shares could rally nearly 79% based on the firm’s $50 price target at Tuesday’s close price. Outback Steakhouse owner Bloomin’ Brands and First Watch Restaurant Group are also on Jefferies’ list. Those stocks are down about 10% and close to 13%, respectively, this year.