Nomura Securities Starts DineEquity (DIN) at Buy

Nomura Securities initiates coverage on DineEquity (NYSE: DIN) with a Buy rating and a price target of $107.00, saying they are looking for a second-half turnaround from Applebee's.

Analyst Mark Kalinowski commented, "We initiate coverage of DineEquity, Inc. (DIN)—the owner and franchisor of the Applebee’s casual-dining restaurant concept and the IHOP family-dining restaurant concept—with a Buy rating and $107 target price. Although we forecast negative same-store sales from Applebee’s in the first half of 2016, our Q3 and Q4 same-store sales forecasts for Applebee’s become the new “high on the sell side.” In the longer term, we see management’s desire to acquire a small, fast-casual growth vehicle through which its franchisees can expand over time into a national footprint as an additional source of upside. Our EPS estimates are $6.31 for 2016 ($0.05 above the Consensus Metrix figure of $6.26) and $6.75 for 2017 ($0.06 above consensus). Our 12-month target price of $107 is based on a 10.5x EV/EBITDA multiple applied to our 2017 EBITDA forecast. Our five-year annualized EPS growth projection is 13%."

For an analyst ratings summary and ratings history on DineEquity click here. For more ratings news on DineEquity click here.

Shares of DineEquity closed at $89.68 yesterday.

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