Canaccord Genuity maintained a Buy rating on Driven Brands (NASDAQ:DRVN) and increased the price target to $20.00 from the previous $19.00. The firm's recent survey of 110 Driven Brands locations, including Oil Change, Take 5 Car Wash, competitor locations, and Auto Glass Now, provided insights into the company's business trends and performance.
The survey revealed consistent performance in the Oil Change segment, neutrality in the Car Wash segment, and a competitive pricing landscape for Auto Glass Now compared to Safelite, with price premiums fluctuating between North Carolina and California.
Despite the challenges faced by Driven Brands' capital-intensive segments like Car Wash, the company's asset-light, franchised Maintenance business continues to generate strong cash flows.
Canaccord Genuity believes that Driven Brands' stock multiple has room to grow once the company addresses the issues within its capital-intensive businesses or finds a way to monetize those assets, which could restore investor confidence.
Following the survey and analysis, the firm slightly adjusted its estimates upwards and reaffirmed its positive stance on the company's stock.
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