Driven Brands price target lowered to $17 from $31 at Credit Suisse

Credit Suisse lowered the firm’s price target on Driven Brands to $17 from $31 and keeps a Neutral rating on the shares. models. While the firm believes the sector is clearly “healthy,” Driven Brands continues “to steal defeat from the jaws of victory,” and it is truly unclear which sector it should be valued against from a comp perspective. The disparity in ROIC between Driven Brands and other franchisee models is a function of a lack of flow through in the model due to the complexities of the business model noted above; and the challenges of leveraging against enterprise fixed costs that are loosely correlated at best with each individual segment. Credit Suisse believes these risks to the business model are greater than investors appreciate.