Driven Brands Holdings, the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Albanese from Benchmark Co. maintained a Buy rating on the stock and has a $22.00 price target.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Michael Albanese has given his Buy rating due to a combination of factors including Driven Brands Holdings’ strategic divestment of its International Car Wash Business. This move allows the company to focus on its core operations and use the proceeds to reduce debt, thereby improving its financial health. The sale of these assets, which were generating significant sales and AEBITDA, is expected to enhance the company’s balance sheet and align with its goal of reducing net leverage.
Additionally, the company’s focus on its core, non-discretionary growth segments like Take 5 and Franchised Brands, which are known for strong unit economics, is a positive indicator. The transaction is anticipated to simplify the business model, allowing for reinvestment in areas with high growth potential. The pro-forma valuation post-transaction suggests a favorable trading multiple, reinforcing the Buy recommendation.
Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DRVN in relation to earlier this year.