Is Dave & Buster's Back?

Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) was beaten up over the course of the coronavirus pandemic, but things may be turning around for this company, at least according to one analyst.

SunTrust Robinson Humphrey upgraded Dave & Busters to a Buy rating from Hold and raised its price target to $22 from $17.

The firm was encouraged by faster than expected reopening plans, steadily improving sales at reopened stores and the company’s new extremely flexible operating model that is driving incremental profits at low volumes (down 80% to 90% from pre-COVID levels).

SunTrust also sees long-term cost savings and stronger than expected development in the 2020 and 2021 earnings. While sales are sensitive to increased COVID concerns, lean operations and strong liquidity are mitigating the downside risk.

A couple other analysts weighed in on Dave & Busters as well:

  • BMO Capital Markets rates it as Market Perform and a $15 price target.
  • Jefferies has a Hold rating with an $11.50 target price.
  • Longbow Research’s Buy rating comes with an $18 price target.

Excluding Friday’s move, Dave & Buster’s stock had vastly underperformed the S&P 500 and Dow Jones industrial average with about a 64% retreat year to date.

Dave & Buster’s stock traded up about 11% to $16.24, in a 52-week range of $4.61 to $48.80. The consensus price target is $14.65.