In a report released yesterday, Jake Bartlett from Truist Financial downgraded Denny’s to a Hold, with a price target of $6.00.
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Jake Bartlett’s rating is based on the recent announcement that Denny’s will be acquired at a price of $6.25 per share, prompting a downgrade from Buy to Hold. This decision reflects the alignment of the agreed sale price with the company’s current valuation metrics, specifically a 7.9x EV/EBITDA multiple for 2026, which is consistent with the recent three-year average but lower than pre-COVID levels.
Additionally, Denny’s reported a miss in its third-quarter 2025 same-store sales and adjusted EBITDA, indicating challenges in the macroeconomic environment, particularly affecting its core lower-income consumer base. Despite some positive offsets in restaurant-level and franchise margins, the overall financial performance fell short of expectations. The acquisition trend in the micro-cap restaurant sector suggests a shift in market dynamics, with private investors seeing opportunities where public market interest has waned.
Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DENN in relation to earlier this year.