Truist Securities analyst Jake Bartlett reiterated a Buy rating and $22.00 price target on Dave & Buster's (NASDAQ: PLAY), saying they view the stock's reaction to bankruptcy concerns as "unfounded".

"We view PLAY's stock decline (-12.6% this morning vs. -1.6% for the S&P) as a severe over-reaction to a WSJ article referencing PLAY's disclosure in its 2Q20 10Q that if it is not in compliance with its debt covenants by 1/11/20 (the actual date is 1/31/20), lenders could force PLAY into Chapter 11 bankruptcy. We continue to assume that PLAY's lenders will again grant covenant relief, especially given visibility into recovering EBITDA at that time as the company emerges from COVID crisis. The language in the 2Q20 10Q is identical to the disclosure in the 1Q20 10Q: "Although the lenders under the existing credit facility may waive the default or forebear the exercise of remedies, they are not obligated to do so." PLAY entered into an amended credit agreement on 4/14/20, which provided relief from its 3.5x maximum leverage ratio covenant with the next test date being 1/31/20 (end of F4Q21)."

For an analyst ratings summary and ratings history on Dave & Buster's click here. For more ratings news on Dave & Buster's click here.

Shares of Dave & Buster's closed at $19.11 yesterday.