BMO trims Dave & Buster’s target after EBITDA miss; UBS cuts valuation
BMO Capital lowered its price target to $22 from $24 on June 16, while UBS reduced its target to $12 from $13. The revision follows muted comparable sales and sales de-leverage, but management projects positive comps for the remainder of the year.
BMO Capital analyst Andrew Strelzik reduced the price target for Dave & Buster’s Entertainment (NASDAQ:PLAY) to $22 from $24 on June 16. The adjustment followed the company’s first-quarter EBITDA missing consensus estimates by $14 million. The shortfall was attributed to muted comparable sales and sales de-leverage.
Despite the earnings miss, BMO maintained an Outperform rating for the stock. The firm cited modestly strengthened quarter-to-date trends and management’s projection of positive comparable sales for the remainder of the year. Strelzik noted that the company is ready to reallocate capital expenditure from store expansion towards reinvestment, supporting an attractive risk-reward profile.
UBS also adjusted its valuation for the stock on the same day, lowering its price target to $12 from $13. The bank maintained a Neutral rating for Dave & Buster’s Entertainment.
The Texas-based operator of entertainment and dining venues faces weaker macro conditions observed in March and April. However, management remains optimistic about same-store sales improvement through 2026, citing effective marketing and investments in innovation as key growth drivers.
The divergence in analyst sentiment highlights the mixed outlook for the entertainment sector. While BMO sees potential in the company’s strategic shift, UBS maintains a more cautious stance on the stock’s near-term prospects.
