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Wednesday, Stifel analysts maintained a Buy rating and a $22.00 price target for Driven Brands (NASDAQ:DRVN), currently trading at $17.37, following an update to their financial model to align with the company’s new reporting structure that began in the first quarter of 2025. According to InvestingPro data, the stock is currently fairly valued, with analyst targets ranging from $16 to $25, suggesting potential upside. The updated segments now include Take 5, Franchised Brands, Car Wash, and Corporate and Other. Notably, the Franchised Brands segment is over 99% franchised and encompasses brands such as CARSTAR, Meineke, Maaco, Uniban, 1-800 Radiator, among other smaller brands.
The analysts at Stifel have affirmed their earnings per share (EPS) estimates for fiscal years 2025 and 2026, indicating no change from previous projections. This decision comes after a thorough review and realignment of their financial model to the company’s newly structured business segments. With a market capitalization of $2.85 billion and trailing twelve-month revenue of $2.34 billion, Driven Brands maintains a solid market position. InvestingPro analysis reveals a "Fair" overall financial health score of 2.01 out of 5, with particularly strong momentum metrics. The re-segmentation provides a clearer picture of Driven Brands’ diverse operations and potential growth areas.
Driven Brands’ Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (AEBITDA) projections for fiscal year 2025 have also been maintained by Stifel analysts. They have kept their forecast at the mid-point of the company’s guidance, which is approximately $520 million to $550 million, excluding the U.S. car wash business. This projection reflects the analysts’ expectations for the company’s financial performance in the coming year.
The re-segmentation of Driven Brands’ reporting structure offers investors a more detailed view of the company’s performance across its various business units. With the new model in place from the first quarter of 2025, Stifel’s reaffirmed ratings and targets suggest confidence in the company’s strategy and future earnings potential.
Investors and stakeholders in Driven Brands can look to the consistency of Stifel’s analysis as a sign of stability in their investment. The company’s clear segmentation and the analysts’ unchanged EPS and AEBITDA estimates for the upcoming fiscal years provide a solid framework for assessing Driven Brands’ financial health and growth trajectory. With last twelve months EBITDA of $429.12 million and a gross profit margin of 42%, the company shows promising operational efficiency. For deeper insights into Driven Brands’ financial metrics and growth potential, including exclusive ProTips and comprehensive analysis, check out the full research report available on InvestingPro.
In other recent news, Driven Brands Holdings Inc. announced a significant divestiture, selling its U.S. car wash business to Whistle Express Car Wash for $385 million. This move is part of a strategic review to focus on its core operations, particularly the Take 5 Oil Change brand, and is expected to streamline the company’s business strategy. Driven Brands plans to use the proceeds from the sale primarily to reduce debt, aiming for a net leverage ratio of 3x or lower by the end of 2026. Additionally, the company has extended its $300 million credit facility to February 27, 2030, providing continued financial flexibility.
In a related development, Driven Brands has restructured its segment reporting to offer a clearer view of its operations, with Take 5 Oil Change now a separate reportable segment. This restructuring does not affect the historical financial results but aims to highlight the company’s growth strategy. Furthermore, BMO Capital Markets raised its price target for Driven Brands to $16.00, reflecting a cautious optimism following the car wash business sale. Leadership changes are also underway, with Daniel Rivera set to become the new President and CEO on May 9, 2025, as Jonathan Fitzpatrick transitions to Non-Executive Chair. These developments underscore Driven Brands’ strategic initiatives and operational adjustments in the automotive services sector.
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