Analyst Unimpressed With Dine Brands' Sluggish Same-Store Sales Trends, Cuts Price Target

KeyBanc analyst Eric Gonzalez reiterated an Overweight rating on the shares of Dine Brands Global, Inc. DIN and lowered the price target from $83 to $78.
The analyst cut the price target to reflect slowing same-store sales trends in March.
Input cost inflation and competition in the industry are also likely to be growth deterrents for the company, KeyBanc noted.
The analyst models 1Q23 SSS growth of 7%, just ahead of the consensus of 6.7%.
But the company's SSS growth estimates for Applebees and IHOP in 1Q23 will likely benefit from easy comparisons in January/ February.
Dine Brands's placer foot traffic data is expected to remain well below the pre-pandemic ranges. The analyst expects the company's IHOP unit, which represents 60% of the profit, to face challenges in staffing its 24-hr units.
The analyst also accounted for Dine Brands’ recent securitization transaction, which prices at the end of 1Q23.
Price Action: DIN shares are trading lower by 2.89% at $65.87 on the last check Monday.
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