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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

Sep 2017BMO CapitalMaintainsOutperform
Aug 2017Canaccord GenuityMaintainsBuy
Aug 2017BMO CapitalMaintainsOutperform

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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