Denny's Shares Rocket: Drivers Of Upside For Same Store Sales Growth In 2025, Says Bullish Analyst

There are drivers of upside to the current 2025 same store sales growth expectations for both Denny’s Corp DENN and its recently acquired breakfast-and-lunch concept Keke's, according to Wedbush.

Denny’s Analyst: Analyst Nick Setyan upgraded the rating for Denny’s from Neutral to Outperform, while raising the price target from $6 to $10.

Denny’s Thesis: The company's introduction of the $2, $4, $6, $8 menu in August, product improvements and menu innovation "have driven significant improvements in guest sentiment," Setyan said in the upgrade note.

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In addition to three co-owned units being opened, Keke’s franchisees opened five units in the fourth quarter, "the same number of total franchisee openings since year-end 2022," the analyst stated.

Keke’s, which is "meaningfully undervalued and underappreciated," could contribute to Denny's EBITDA growth returning to the 5%-7% annual level, he added.

"On the heels of preannounced SSS growth upside at both Denny’s (1.1% vs. 0.2%) and Keke’s at ICR in January, we believe the probability of upside vs. current 2025 SSS growth expectations is high," Setyan wrote.

The company is likely to accelerate share repurchases in 2025 to around $30 million, he further stated.

DENN Price Action: Shares of Denny’s had risen by12.92% to $7.48 at the time of publication on Friday.

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