The bull case for Dave & Buster’s Entertainment remains intact, Raymond James says. Analyst Brian Vaccaro maintained a strong buy rating on Dave & Buster’s and raised his price target, saying the restaurant and entertainment firm’s presentation at its analyst day this week supported his positive view on the stock. PLAY YTD mountain Dave & Buster’s Entertainment shares YTD “Management’s presentation detailed its multi-pronged strategy to revitalize comps at D & B, improve margins ($40-60M cost savings), and grow new units which it believes can drive substantial EBITDA growth vs. current levels (illustrative ~$1B 3yr target vs. $527M PF 2022),” Vaccaro wrote. Dave & Buster’s is outperforming the broader market this year, up by 30% while the S & P 500 is higher by 13%. However, the analyst’s $60 price target, raised from $55, suggests the stock can actually rise another 30% from Tuesday’s close. The analyst expects that some investors may take a “wait and see” approach to Dave & Buster’s, given a murky economic outlook that may hurt discretionary spending. However, Vaccaro thinks there is some “lower hanging fruit” the company can take on to support the business, such as strategic pricing. “If comps can return to positive territory, high single-digit unit growth and margin expansion should drive 10%+ EBITDA growth over the next few years,” Vaccaro wrote. —CNBC’s Michael Bloom contributed to this report.
