Driven Brands (NASDAQ:DRVN) Stock Price Down 4.5% Following Analyst Downgrade

Key Points

• Driven Brands shares fell 4.5% after Royal Bank of Canada cut its price target from $18 to $17, though it kept an outperform rating. The stock traded around $13.20, well below the revised target.
• The company’s first-quarter results beat expectations, with adjusted EPS of $0.30 versus $0.25 expected and revenue of $484.4 million slightly above estimates. System-wide sales rose 6% and same-store sales increased 2%, led by Take 5 Oil Change.
• Despite the earnings beat, revenue fell 6.2% year over year and management left its outlook unchanged, which may be limiting investor enthusiasm. Analysts remain mixed, with a consensus rating of moderate buy and a consensus price target of $17.18.

Driven Brands Holdings Inc. (NASDAQ:DRVN - Get Free Report) dropped 4.5% during trading on Friday after Royal Bank Of Canada lowered their price target on the stock from $18.00 to $17.00. Royal Bank Of Canada currently has an outperform rating on the stock. Driven Brands traded as low as $13.30 and last traded at $13.2010. Approximately 102,928 shares traded hands during trading, a decline of 94% from the average daily volume of 1,703,110 shares. The stock had previously closed at $13.83.

A number of other brokerages have also recently commented on DRVN. Canaccord Genuity Group set a $18.00 price target on shares of Driven Brands in a research report on Monday. BMO Capital Markets reduced their price target on shares of Driven Brands from $18.00 to $14.00 and set a "market perform" rating on the stock in a research report on Thursday, May 21st. Morgan Stanley reduced their price target on shares of Driven Brands from $17.00 to $16.00 and set an "equal weight" rating on the stock in a research report on Wednesday, May 20th. Benchmark reiterated a "buy" rating on shares of Driven Brands in a research report on Tuesday, May 26th. Finally, Piper Sandler increased their price target on shares of Driven Brands from $11.00 to $13.00 and gave the company a "neutral" rating in a research report on Wednesday, May 20th. Two analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Driven Brands currently has an average rating of "Moderate Buy" and a consensus price target of $17.18.

Driven Brands News Summary

Here are the key news stories impacting Driven Brands this week:

• Positive Sentiment: Driven Brands reported first-quarter results that beat expectations, with adjusted EPS of $0.30 versus the $0.25 consensus and revenue of $484.4 million slightly above estimates. The company also said system-wide sales rose 6% and same-store sales increased 2%, signaling continued momentum at its core business, especially Take 5 Oil Change.
• Positive Sentiment: BTIG Research reaffirmed its buy rating and set a $17 price target, while Royal Bank of Canada lowered its target from $18 to $17 but kept an outperform rating. Both imply meaningful upside from current levels and suggest analysts see room for further recovery.
• Neutral Sentiment: Several post-earnings notes highlighted that Take 5 remains the key growth driver, but investors are still watching deleveraging progress, softer traffic trends, and restatement-related costs. Article Title
• Neutral Sentiment: A Seeking Alpha commentary said Driven Brands looks cheaper on valuation, but it is not yet an attractive buy because leverage remains high and near-term earnings growth looks limited. Article Title
• Negative Sentiment: Even with the earnings beat, revenue still declined 6.2% from the same quarter last year, and the company kept its outlook unchanged, which may temper enthusiasm for a full-speed rerating.

Hedge Funds Weigh In On Driven Brands

Several institutional investors and hedge funds have recently modified their holdings of DRVN. Osaic Holdings Inc. increased its holdings in shares of Driven Brands by 82.1% during the second quarter. Osaic Holdings Inc. now owns 2,087 shares of the company's stock valued at $37,000 after acquiring an additional 941 shares in the last quarter. EverSource Wealth Advisors LLC increased its holdings in Driven Brands by 744.6% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,103 shares of the company's stock worth $37,000 after buying an additional 1,854 shares in the last quarter. Comerica Bank increased its holdings in Driven Brands by 328.8% in the 4th quarter. Comerica Bank now owns 2,933 shares of the company's stock worth $43,000 after buying an additional 2,249 shares in the last quarter. Larson Financial Group LLC increased its holdings in Driven Brands by 1,347.7% in the 4th quarter. Larson Financial Group LLC now owns 3,822 shares of the company's stock worth $57,000 after buying an additional 3,558 shares in the last quarter. Finally, SJS Investment Consulting Inc. increased its holdings in Driven Brands by 420.2% in the 1st quarter. SJS Investment Consulting Inc. now owns 4,500 shares of the company's stock worth $57,000 after buying an additional 3,635 shares in the last quarter. 77.08% of the stock is currently owned by institutional investors.

Driven Brands Price Performance

The firm has a fifty day moving average of $13.11 and a 200 day moving average of $13.93. The company has a market capitalization of $2.20 billion, a P/E ratio of 16.11 and a beta of 0.97. The company has a current ratio of 0.75, a quick ratio of 0.67 and a debt-to-equity ratio of 2.45.

Driven Brands (NASDAQ:DRVN - Get Free Report) last released its quarterly earnings data on Thursday, June 11th. The company reported $0.30 EPS for the quarter, topping the consensus estimate of $0.25 by $0.05. Driven Brands had a return on equity of 25.83% and a net margin of 6.55%.The company had revenue of $484.44 million during the quarter, compared to the consensus estimate of $480.84 million. During the same period last year, the company earned $0.27 EPS. Driven Brands's revenue for the quarter was down 6.2% on a year-over-year basis. On average, equities research analysts anticipate that Driven Brands Holdings Inc. will post 1.04 EPS for the current year.

Driven Brands Company Profile

Driven Brands Holdings Inc NASDAQ: DRVN is a leading North American provider of automotive aftermarket services, operating through a network of franchised and company-owned locations. The company's platform encompasses a diverse portfolio of car care and maintenance brands, including Meineke Car Care Centers, Maaco Collision Repair & Auto Painting, Take 5 Oil Change, and Carstar Collision Repair. Driven Brands delivers a full range of services from routine maintenance and oil changes to collision repair, paint protection, and vehicle customization.

Headquartered in Charlotte, North Carolina, Driven Brands serves both individual consumers and commercial clients across the United States and Canada.

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