Dave & Buster's Shares Jump on 2 Analyst Upgrades - TheStreet

Dave & Buster's Shares Jump on 2 Analyst Upgrades

Two analysts upgraded Dave & Buster's, minimizing a media report that the chain plans job cuts and warned that bankruptcy could be an option.
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Dave & Buster’s Entertainment  (PLAY) - Get Report shares jumped Friday after two analysts upgraded their ratings for the entertainment/dining chain.

The upgrades and stock move followed a Thursday Wall Street Journal report that the Dallas company planned 1,300 job cuts and warned that it might have to file for bankruptcy.

The company’s shares recently traded at $16.19, up 15%. They were down 60% year to date, after dropping 12% on Thursday. 

The coronavirus pandemic hammered all of retail including Dave & Buster’s, forcing it to close stores and keeping consumers at home.

Raymond James analyst Brian Vaccaro lifted his rating to outperform from market perform, with a share-price target of $20. The stock’s fall was “overdone,” he said, according to Bloomberg.

“We are optimistic that fundamentals can continue to improve as additional units reopen and covid concerns (hopefully) dissipate,” he said.

Stifel analyst Chris O’Cull boosted his rating on Dave & Buster’s to buy from hold, raising his share-price target to $20 from $18.

“The stock is mispricing” bankruptcy risk, after the Journal highlighted the language about bankruptcy in the company’s security filings, he said, according to Bloomberg.

O’Cull has “greater confidence” that Dave & Buster’s has “cracked the code for achieving profitability at lower sales volumes, which is a critical step toward negotiating a new or amended credit facility.”

Deutsche Bank analyst Brian Mullan said “there is nothing new here” in the Journal story, Bloomberg reports.

The 1,369 Dave & Buster’s workers who are scheduled to be dismissed earlier had been furloughed, Restaurant Business reported, citing federal Worker Adjustment and Retraining Notification alerts.