DENN Takeaways from New York City NDR Leave Us More Bullish

By Mark Kalinowski Published on November 25, 2019 at 12:00 AM

We recently hosted a Denny’s (DENN; Buy) non-deal roadshow (NDR) in New York City. We thank Denny’s CEO John Miller and Senior Director Investor Relations Curt Nichols for their participation! Following the NDR, we feel more confident in our bullish thesis on DENN. We maintain our Buy rating on DENN, and note the following:

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DENN Does Anybody Want to See Denny’s Acquire Another Concept

By Mark Kalinowski Published on November 5, 2019 at 12:00 AM

Since reporting its third-quarter results and hosting its related conference call late last month, Denny’s (DENN; Buy) stock has mostly drifted downward. We believe that one factor contributing to this slide has been concern on the Street that Denny’s might acquire part or all of another restaurant concept. In our view, it would be a mistake for Denny’s to do so. We believe the odds do not favor Denny’s pursuing this route, although we (of course) cannot rule out this possibility with 100% certainty. We reiterate our Buy rating on DENN, and note the following:

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DENN (Post-Call) Moves Closer to Beyond Refranchising

By Mark Kalinowski Published on October 29, 2019 at 12:00 AM

After Tuesday’s market close, Denny’s (DENN; Buy) reported adjusted Q3 EPS of $0.18, coming in ahead of our $0.16 forecast and sell-side consensus (according to Consensus Metrix) of $0.16. We attribute the EPS beat to a combination of: (1) better-than-expected Payroll and Benefits/Company Restaurant Sales (37.4% actual vs. 38.3% projected), (2) better-than-anticipated G&A/Revenues (13.2% actual vs. 13.8% estimated), (3) better-than-expected D&A/Revenues (3.5% actual vs. 4.2% forecasted), (4) lower-than-anticipated interest expense ($4.2 million actual vs. $5.3 million projected), and (5) a favorable adjusted tax rate (15.5% actual vs. 21.2% forecasted) — all partially offset by some other factors (such as lower-thananticipated Company Restaurant Sales, due to the faster-than-expected pace of refranchising).

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