In a report released today, Christian Carlino from J.P. Morgan upgraded Driven Brands Holdings to a Buy, with a price target of $23.00.
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Christian Carlino has given his Buy rating due to a combination of factors that suggest a positive outlook for Driven Brands Holdings. The company is expected to benefit from defensive demand amid macroeconomic uncertainties, particularly as tariffs impact consumer spending. This defensive positioning is bolstered by the divestiture of the US Car Wash segment, which provides better visibility into the latter half of the year.
Additionally, Driven Brands’ Take 5 segment continues to show strong performance, outpacing broader maintenance demand and gaining market share. The company’s valuation is attractive, trading at a lower EV/EBITDA multiple compared to peers, with expectations of further deleveraging by the end of 2026. This deleveraging is anticipated to alleviate financial overhangs and enhance the stock’s re-rating potential. Overall, the combination of prudent management guidance, strong segment performance, and favorable valuation metrics underpins the Buy rating.
In another report released today, Stifel Nicolaus also maintained a Buy rating on the stock with a $23.00 price target.