Benchmark Co. analyst Todd Brooks has maintained their neutral stance on DIN stock, giving a Hold rating on August 7.
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Todd Brooks has given his Hold rating due to a combination of factors impacting Dine Brands Global. Despite the company reporting second-quarter revenues that exceeded expectations, driven by strong same-store sales at Applebee’s and recent acquisitions, there were misses in gross profit, adjusted earnings per share, and adjusted EBITDA compared to consensus estimates. The company’s operating losses and higher-than-expected general and administrative expenses contributed to these shortfalls.
Management’s updated guidance reflects both strengths and challenges. While there is optimism with Applebee’s improved same-store sales projections, IHOP’s guidance remains conservative. Additionally, increased spending on general and administrative expenses and capital expenditures to support growth initiatives and brand conversions are weighing on profitability expectations. These factors, combined with the recent debt refinancing at a higher interest rate, suggest a cautious approach, justifying the Hold rating on the stock.
In another report released on August 7, Barclays also maintained a Hold rating on the stock with a $22.00 price target.