Denny’s upgraded to Outperform from Neutral at Wedbush

Wedbush analyst Nick Setyan upgraded Denny’s (DENN) to Outperform from Neutral with a price target of $10, up from $6. First, the firm believes Keke’s is meaningfully undervalued and underappreciated, and is poised to contribute to a resumption in Denny’s annual 5%-7% EBITDA growth algorithm. Second, Wedbush thinks drivers of upside vs. current 2025 same-store sales growth expectations at both Denny’s and Keke’s exist. Third, it expects a step-up in share repurchases in 2025, resulting in annual free cash flow/share growth of 10%-plus. Lastly, the firm views Denny’s $100M in owned property and interest rate swaps that ensure an interest rate on its debt in the low-5% range through 2033 as not fully appreciated by investors.