Kate McShane, an analyst from Goldman Sachs, maintained the Hold rating on Driven Brands Holdings (DRVN – Research Report). The associated price target is $16.00.
Kate McShane’s rating is based on several factors influencing Driven Brands Holdings’ current and future performance. The company reported a better-than-expected adjusted EBITDA for the fourth quarter, which was positively received by the market. Additionally, Driven Brands announced a strategic move to sell its US car wash business, a decision viewed favorably as it would eliminate a lower-margin segment and enhance the focus on higher-margin international operations.
Despite these positive developments, McShane remains cautious due to the anticipated moderation in same-store sales growth for the Take 5 Oil Change segment and the company’s overall slower growth outlook. The management’s commitment to deleveraging and improving operations is encouraging, yet macroeconomic uncertainties contribute to a prudent approach in the near term. These mixed factors collectively underpin the Hold rating, reflecting both optimism for strategic changes and caution regarding growth prospects.
In another report released yesterday, BMO Capital also maintained a Hold rating on the stock with a $16.00 price target.