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7% Downside In Dave & Buster's Based On Stifel's Fair-Value Estimate

7% Downside In Dave & Buster's Based On Stifel's Fair-Value Estimate
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Stifel has downgraded Dave & Buster's Entertainment, Inc. (NASDAQ: PLAY) to Hold from Buy on potential U.S. recession concerns.

"We have grown extremely cautious on the restaurant industry as a whole, and today we downgrade PLAY from Buy to Hold mainly to reflect our bearish Macro Sentiment (w/ 1Q16/2Q16 industry comps of just +1.5 percent/+0.7 percent (or below key +2 percent threshold)); and (2) limited earnings/comp upside opportunity ahead of likely U.S. recession," analyst Paul Westra wrote in a note.

As such, the analyst cut his fair-value estimate to $45 from $50. Westra also slashed his FY16 EPS estimate to $1.93 from $2.05 on revenue of $984.3 million (down from $997.4 million).

Related Link: No Soup For You! Stifel Knocks Darden To Sell

However, Westra is bullish on Dave & Buster's long term given the Dallas, Texas-based company's ongoing strong momentum (along with names like Top Golf) on the local destination dining-and-entertainment business. The analyst said this momentum capitalizes on America's long-term preference shift toward environment-forward brands.

At time of writing, shares had plunged 4.94 percent on the day to $46.00.
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Latest Ratings for PLAY

Mar 2017Maxim GroupInitiates Coverage OnBuy
Dec 2016SunTrust Robinson HumphreyInitiates Coverage OnBuy
Oct 2016Wells FargoInitiates Coverage OnOutperform

View More Analyst Ratings for PLAY
View the Latest Analyst Ratings

Posted-In: Paul Westra StifelAnalyst Color Downgrades Price Target Restaurants Analyst Ratings General Best of Benzinga


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