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Strategies & Market Trends : Speculating in Takeover Targets
CTG 7.460+0.7%3:47 PM EDT

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From: E_K_S9/19/2019 3:43:08 PM
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Stifel sees competition heating up for Dave & Buster's
Sep. 19, 2019 3:39 PM ET|

Stifel starts off coverage on Dave & Buster's ( PLAY +0.3%) with a Hold rating.

The firm see competitive pressure on the chain with its high store-level margin and new unit returns attracting new eatertainment concepts to the sector.

"Our due diligence suggests the competitive headwind is unlikely to abate anytime soon and could be difficult to combat unless the company revitalizes many of its existing venues," warns analyst Chris O'Cull.

Looking further ahead, O'Cull and team thinks Dave & Buster's could be a compelling leveraged buyout target, which is enough optionality to potentially support the current valuation.
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