As previously reported, Stifel analyst Chris O’Cull upgraded Dave & Buster’s to Buy from Hold with a price target of $20, up from $18, as he believes yesterday’s 26% pullback following the publication of a Wall Street Journal article calling attention to language in the company’s 10-Q about Chapter 11 bankruptcy risk presents “an attractive entry point for investors with higher levels of risk tolerance.” The analyst, in a note titled “Share Weakness Provides Investors Opportunity to Level Up,” said he has greater confidence following the company’s recent earnings report and his subsequent talks with management that the company has “cracked the code for achieving profitability at lower sales volumes.” O’Cull expects Dave & Buster’s to successfully restructure or amend its credit facility without the need for additional equity, he added.
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