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One restaurant stock that ‘stands out’ despite fears of recession

Dave & Buster’s Entertainment Inc (NASDAQ: PLAY) has recovered about 20% since late September but a Deutsche Bank analyst is convinced there’s more to come in the months ahead.

Dave & Buster stock has 30% upside

On Tuesday, Brian Mullan announced a “buy” rating on the restaurant and entertainment company and said its shares could climb to $48. That represents about a 30% upside on its previous close.

Last week, the Fed signalled no intent of “pausing” just yet (link) that raised the possibility of an economic slowdown by that much. But Mullan is convinced that Dave & Buster could stand tall in the face of a recession.

When we scan our restaurant coverage universe looking for opportunities in what is still a very tough macro environment, we think the risk reward on Dave & Buster stock stands out as fairly compelling at present.

Why else is Mullan bullish on ‘PLAY’

In its latest reported quarter, Dave & Buster saw a 24% annualised increase in revenue to a record $469 million.

According to the Deutsche Bank analyst, the Nasdaq-listed firm will outperform its pure-play casual dining restaurant peers as long as it can maintain that top-line growth at least through the upcoming holiday season.

In October, CFO Michael Quartieri and Senior Vice President Les Lehner loaded up on “PLAY”, signalling insider confidence in the future of the company. That could be another reason to invest in Dave & Buster stock.

On top of that, the Dallas-headquartered firm recently completed its $835 million acquisition of Main Event that it expects will generate up to $20 million in cost synergies within 12 to 18 months.

The post One restaurant stock that ‘stands out’ despite fears of recession appeared first on Invezz.

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