DIN - A Deeper Dive Into Dine Brands' Weakness
2024-06-17 10:34:43 ET
Summary
- Dine Brands continues to perform poorly with the Q1 results, also casting doubt on the reaffirmed 2024 financial guidance.
- Underneath, there are important fundamental factors driving the weak performance especially for Applebee's and Fuzzy's, and I don't see an improvement in sight.
- Despite trading at a forward P/E of just 6.1, the valuation isn't attractive due to the underlying operational performance.
Dine Brands Global, Inc. ( DIN ) has reported the company’s Q1 results after my prior article on the stock. The continued weakness, missing Wall Street analysts estimates, now requires a more critical look at Dine Brands' underlying performance. I believe that the operational outlook is fundamentally weak, with serious underlying factors driving the bad earnings growth.
Markets haven’t appreciated the recent financial performance – from my previous article on the stock, published on the 11 th of March, Dine Brands has had a total return of -23% compared to an S&P 500 return of 6%. The previous article, titled “ Dine Brands: Unfortunate Weakness In Applebee’s 2024 Guidance ”, focused on the Applebee’s recent weakness in attracting sales and new restaurant opportunities, and the company’s remaining high debt from the Applebee’s acquisition made in 2007. I rated the stock at Hold due to the stock’s low valuation, pricing already in further worries....
A Deeper Dive Into Dine Brands' Weakness