What Happened?
Shares of diner restaurant chain Denny’s (NASDAQ:DENN) jumped 5.2% in the afternoon session as the company garnered a favorable 'Buy' consensus rating from Wall Street analysts.
According to a survey of 17 analysts, a significant majority hold a positive view of the company. Specifically, 53% of analysts recommend a 'Strong Buy' and another 24% recommend a 'Buy' for the stock. The remaining 24% suggest a 'Hold' position, with no analysts advising investors to sell. This strong endorsement from the financial community indicates a bullish outlook on the company's performance, likely boosting investor confidence and contributing to the stock's upward movement.
Is now the time to buy Denny's? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Denny’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 23 days ago when the stock gained 4.2% on the news that investors cheered a government report showing that inflation remained steady in July.
The steady inflation figures have fueled expectations that the Federal Reserve may soon consider an interest rate cut to stimulate the economy, a move that would likely benefit consumer discretionary spending, including dining out. The July Consumer Price Index (CPI) rose 2.7% from a year earlier, meeting the previous month's pace and coming in slightly below economists' expectations of a 2.8% increase. On a monthly basis, the CPI rose 0.2%, a slowdown from the 0.3% increase seen in June. While the cost of dining out continued to climb, rising 0.3% in July, this was offset by a 0.1% dip in grocery prices, contributing to the overall stable inflation picture.
The market's positive reaction sent major stock indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, soaring. This optimism spilled over into the restaurant sector, which has been grappling with a challenging macroeconomic environment marked by high costs and concerns over consumer traffic.
Denny's is down 25.3% since the beginning of the year, and at $4.69 per share, it is trading 36.6% below its 52-week high of $7.39 from November 2024. Investors who bought $1,000 worth of Denny’s shares 5 years ago would now be looking at an investment worth $421.31.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.