Shares of Dine Brands Global (NYSE:DIN), the parent company of Applebee's and IHOP, soared by as much as 14.5% in early trade, reaching a two-month high of $35.76.
This surge follows a bullish outlook from brokerage firm Wedbush, which upgraded its rating on the stock to "outperform" from "neutral" and raised its price target to $47 from $37, representing a nearly 50% premium to the stock’s previous close.
Wedbush’s optimistic outlook was bolstered by the potential for share repurchases exceeding $100 million in the second half of FY25, following the refinancing of Dine Brands' loans.
The brokerage also highlighted the company's ongoing menu testing at its Applebee's and IHOP locations, predicting that these initiatives would provide compelling value to customers and help stabilize same-store sales growth.
A key factor in Wedbush’s upgrade is Dine Brands’ fully franchised model, which minimizes margin sensitivity to revenue fluctuations and provides greater visibility into earnings and free cash flow generation.
Despite a year-to-date decline of approximately 36%, the stock is poised for its best day since November 9, 2020.
Of the 10 brokerages covering the stock, five rate it a "buy," with a median price target of $40, according to data from LSEG.