Truist Securities has expressed continued confidence in Denny's (NASDAQ:DENN) Corporation (NASDAQ: DENN), maintaining a Buy rating and a price target of $10.00.
The firm's analysis suggests that Denny's third-quarter sales for 2024 are expected to be slightly above market consensus, with an estimated system-wide same-store sales (SSS) increase of 0.5%, closely aligning with Truist's projection of a 1.0% rise.
The company's year-over-year sales growth is believed to have bottomed out in mid-August, just before Denny's reintroduced its value menu priced at $2, $4, $6, and $8. This menu, which excludes the $10 option, has historically been successful for Denny's from 2010 to 2022 and is reportedly resonating with customers once again.
Truist notes that among the full-service restaurants (FSR) it covers, Denny's is the only one with year-over-year comparisons that are expected to ease in October. This factor contributes to the firm's anticipation of a sustained improvement in sales growth for the restaurant chain.
In other recent news, Denny's Corporation has appointed Christopher D. Bode as the new President and Chief Operating Officer, succeeding Kelli F. Valade who will continue her role as CEO.
This development is part of a broader shift in the company's leadership structure. On the financial front, the company reported Q2 2024 earnings with total operating revenue reaching $115.9 million, despite a slight decline in same-restaurant sales.
Denny's also revealed plans for the expansion of its virtual brand, Banda Burrito, and the opening of new restaurants. However, the company anticipates domestic system-wide same-restaurant sales for 2024 to range between -1% and +1% compared to 2023.
InvestingPro Insights
Recent InvestingPro data provides additional context to Truist Securities' optimistic outlook on Denny's Corporation (NASDAQ:DENN). Despite the company's market cap of $318 million and a P/E ratio of 17.66, Denny's faces some challenges. The company's revenue for the last twelve months as of Q2 2024 stood at $455.44 million, with a slight decline in revenue growth of -3.65% over the same period.
InvestingPro Tips highlight that Denny's management has been aggressively buying back shares, which could be seen as a vote of confidence in the company's future prospects. This aligns with Truist's positive stance on the stock. However, it's worth noting that three analysts have revised their earnings downwards for the upcoming period, which investors should keep in mind alongside Truist's optimistic sales projections.
The stock's price movements have been quite volatile, with a significant 27.09% decline over the past six months. This volatility could present both risks and opportunities for investors considering Denny's stock. For those seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide deeper insights into Denny's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.