Wedbush upgrades Dine Brands with sales challenges priced in

Wedbush analyst Nick Setyan upgraded Dine Brands to Outperform from Neutral with a price target of $47, up from $34. The firm believes the company’s current sales challenges are well understood and reflected in the stock’s “depressed valuation.” Share catalysts for multiple expansion over the next twelve months exist, as a $100M accelerated share repurchase plan is probable in the second half of fiscal 2025 after Dine’s refinancing, which is greater than 20% of the current market capitalization, the analyst tells investors in a research note. Second, Wedbush expects both Applebee’s and IHOP to “solve the proper value equation” heading into 2025. The firm also views Dine’s 100% franchised model, which it says minimizes margin sensitivity to sales challenges and ensures a high degree of visibility into EBITDA and free cash flow generation, is underappreciated.