Market Overview

Analyst: 3 Reasons The Operator Of Applebee's And IHOP Is Now A Buy

Analyst: 3 Reasons The Operator Of Applebee's And IHOP Is Now A Buy

The upside case for Dine Brands Global Inc (NYSE: DIN), the parent company of Applebee's and IHOP restaurant concepts, can now be made after the company hosted its analyst day presentation, according to Raymond James.

The Analyst

Raymond James' Brian Vaccaro upgraded Dine Brands' stock from Market Perform to Outperform with a newly established $85 price target.

The Thesis

Dine Equity hosted its analyst day last week and among Vaccaro's takeaways were:

  • Applebee's "sharp" sales turnaround since October is due to various value promotions including $1 alcoholic drinks. The company is looking to re-establish its brand among consumers by offering "disruptive value offers";
  • The company's new CEO Steve Joyce brings to the table the necessary experience in operating multiple brands with a highly franchised business model'
  • Prior concerns surrounding Applebee's royalty collection issues and store closures could be resolved this year. Royalty and ad fund collections are expected to normalize and the company is looking at ways to improve average franchisee store margins by 200 to 300 basis points; and
  • IHOP contributes more than 50 percent of Dine Equity's total EBITDA and boasts low food costs and a significant growth opportunity ahead.

The analyst also detailed three reasons to now be buyers of the stock, including expectations for comps to outperform over the next few quarters, expectations for an EPS improvement in 2019 from $5 to $7, and investors should re-rate the stock's multiple higher from its "depressed levels."

Price Action

Shares of Dine Brands were trading higher by more than 8 percent Monday and hit a new 52-week high of $74.94.

Related Links:

11 Places To Eat Free On Your Birthday

5 Easy Ways To Get A Free (Or At Least Cheaper) Meal

Image credit: Anthony92931 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Latest Ratings for DIN

Oct 2019MaintainsOverweight
Sep 2019Initiates Coverage OnBuy
Aug 2019MaintainsOutperform

View More Analyst Ratings for DIN
View the Latest Analyst Ratings

Posted-In: Applebee's Brian Vaccaro IHOPAnalyst Color Upgrades Restaurants Analyst Ratings General Best of Benzinga


Related Articles (DIN)

View Comments and Join the Discussion!

Latest Ratings

CRWDNomuraInitiates Coverage On65.0
LBRTBank of AmericaInitiates Coverage On
CISNWilliam BlairDowngrades
HCMBank of AmericaReinstates
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Investors Are Heavily Discounting Google, Facebook's Growth Prospects, Says KeyBanc

Morgan Stanley Gives Chegg's Business Top Grades, But Not The Stock