Dine Brands Global (DIN – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Nick Setyan from Wedbush downgraded the rating on the stock to a Hold and gave it a $28.00 price target.
Nick Setyan has given his Hold rating due to a combination of factors affecting Dine Brands Global. Despite the stock trading at a discount compared to its historical multiples and peers, Setyan does not foresee any positive catalysts in the near to medium term that could drive the stock higher. The anticipated sales growth from initiatives like the Really Big Meal Deal at Applebee’s has not met expectations, and there is skepticism about IHOP’s ability to improve its sales trajectory through value-focused strategies.
Furthermore, the outlook for unit growth at both Applebee’s and IHOP is not promising, with pressures on sales and margins leading to concerns about meeting future growth estimates. The company’s fully franchised model limits its EBITDA sensitivity, but the slow decline in system sales growth and negative net unit growth projections suggest challenges ahead. Without improvements in unit growth and stable sales growth, it is difficult to project EBITDA growth beyond 2025, leading to a cautious stance on the stock.