Driven Brands Holdings ( NASDAQ: DRVN ) landed a Buy rating from Benchmark in new analyst coverage.
Analyst John Lawrence and team pointed to DRVN's solid industry position with 4.7K units and 5% market share making it a leading player with scale benefits.
"DRVN’s scaled and diversified platform formula is a proven cash generator. The strategy is to add new stores, grow same-store sales, and deliver stable margins which results in significant cash flow that is reinvested in the business."
Also in the mix, the DRVN operating model is said to possess strong unit economics, which could be attractive to perspective franchisees to join and stay within the network.
Benchmark assigned a price target of $40 on DRVN after noting that the stock trades at 20.7X the FY23 adjusted EPS to mark a discount to its peers and at the lower end of its 52-week range.
The Seeking Alpha Quant Rating on Driven Brands slipped to Hold from Buy on January 26.
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Driven Brands attracts buy rating from Benchmark