Denny's (DENN) Stock Forecast & Price Target

Denny's Corp demonstrates a positive outlook due to recent trends indicating improvement in same-store sales, which have shown encouraging developments despite some earlier volatility. The company’s business model is highly franchised, providing a stable revenue stream from both food and beverage sales as well as royalties and fees from franchise operations, enhancing its financial resilience. Additionally, the acquisition of the Keke's Breakfast Cafe brand represents a significant growth opportunity, positioning Denny's to capture an expanding market segment and potentially bolster overall profitability.

Denny's Corp has reaffirmed a disappointing full-year 2025 same-store sales guidance of down 2.0% to up 1%, with expectations leaning towards the lower end, reflecting a challenging operating environment for the family dining sector. In the second quarter of fiscal 2025, the Denny's brand experienced a 1.3% decline in domestic systemwide same-store sales, contributing to an EBITDA miss that was exacerbated by general and administrative costs, despite some support from restaurant-level and franchise margins. Additionally, the company's expansion efforts with the Keke's brand remain uncertain outside Florida, and recent sales data indicates a concerning 300 basis point decline in trends, highlighting the financial pressures on lower-income consumers, which could further stunt Denny's growth potential.