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On Thursday, Truist Securities analysts raised the price target for Dave & Buster’s stock (NASDAQ: PLAY) to $22 from the previous target of $18. The stock rating remains at Hold. The analysts anticipate a slightly negative setup for the company’s first quarter 2025 results, which are expected to be announced on Monday, June 10, after market close.
The analysts expect Dave & Buster’s to miss same-store sales (SSS) and adjusted EBITDA targets for the first quarter. However, they noted an encouraging start to the second quarter, citing improved sales trends in April and May compared to February. This improvement is attributed to new games, TV advertising, menu updates, and better weather conditions.
Despite the positive sales trends, the analysts caution that growth rates remain volatile. They also mentioned that the company’s remodel program seems to be in a state of uncertainty, although development efforts are proceeding as planned.
The decision to raise the price target is based on the observed improvement in sales trends and a reduction in macroeconomic risks. The analysts adjusted the target EV/EBITDA multiple to 4.6x from 4.3x, reflecting their updated outlook for the company.
In other recent news, Dave & Buster’s Entertainment, Inc. has been the subject of multiple developments impacting investor perspectives. Moody’s Ratings downgraded the company’s corporate family rating from B1 to B2, citing weak customer traffic and a challenging consumer environment. The rating agency also changed the outlook from stable to negative, highlighting concerns about the company’s liquidity and financial metrics. Meanwhile, UBS analyst Dennis Geiger significantly lowered the price target for Dave & Buster’s from $35 to $18, maintaining a Neutral rating due to macroeconomic headwinds and brand-related challenges. BMO Capital Markets also adjusted its outlook, reducing the price target to $30 from $47 but retaining an Outperform rating, noting the company’s inexpensive valuation as a potential opportunity for investors. Additionally, Dave & Buster’s announced the nomination of Allen R. Weiss and Nathaniel J. Lipman to its Board of Directors as part of a strategic leadership refresh. Raymond (NSE:RYMD) James analysts reiterated a Market Perform rating, adjusting their financial estimates downward in anticipation of lower sales performance. These developments come as the company works to address execution issues and adapt to a challenging economic landscape.
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