Denny's (DENN) Stock Forecast & Price Target

Denny's Corp, as a leading full-service restaurant chain in the U.S. and select global markets, demonstrates resilience in its financial performance, with recent trends indicating improved same-store sales after a period of volatility. The company's growth strategy, bolstered by a highly franchised operating model, positions it well to capitalize on emerging opportunities, particularly through the Keke's Breakfast Cafe brand. Additionally, the current market dynamics in the micro-cap restaurant sector may present unique opportunities for long-term investors, enhancing the company's appeal as it navigates challenges with its operating model and franchisee base.

The negative outlook on Denny's stock is primarily indicated by its reaffirmed fiscal year 2025 same-store sales (SSS) guidance, suggesting a tough operating environment, with expectations leaning towards the lower end of the anticipated range. The company reported a 2.9% decline in systemwide SSS, coupled with a revenue miss of $113 million, falling short of the $116 million consensus. Additionally, the performance of the Keke's Breakfast Cafe brand remains uncertain outside its established Florida market, raising concerns about potential growth impairment among existing Denny's franchisees amidst a challenging macroeconomic landscape affecting lower-income consumers.