Brian McNamara, an analyst from Canaccord Genuity, maintained the Buy rating on Driven Brands Holdings. The associated price target remains the same with $24.00.
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Brian McNamara has given his Buy rating due to a combination of factors that highlight Driven Brands Holdings’ strategic positioning and potential for growth. The recent announcement of the sale of their International Car Wash business is seen as a positive move, allowing the company to focus more on its core operations in Oil Change, Collision, and Auto Glass. This divestiture is expected to streamline operations and enhance the company’s asset-light, franchised Maintenance business, particularly the Take 5 Oil Change segment, which is known for generating strong cash flows.
Furthermore, despite some seasonal fluctuations in the number of cars serviced, the overall stability in promotional activities and customer retention in the oil change sector is encouraging. The company’s ability to maintain a solid average of customers not deferring oil changes, even amidst economic challenges, signifies resilience. Additionally, the potential for Take 5 to capture a larger share of the fragmented do-it-for-me oil change market presents a significant growth opportunity. These factors, coupled with the anticipated expansion of valuation multiples following the divestitures, underpin McNamara’s confidence in Driven Brands Holdings’ future performance.
According to TipRanks, McNamara is an analyst with an average return of -1.9% and a 49.04% success rate. McNamara covers the Consumer Cyclical sector, focusing on stocks such as Yeti Holdings, Driven Brands Holdings, and SharkNinja, Inc..