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Investors looking for a solid restaurant play can expect a “compelling” risk-reward from shares of Dave & Buster’s Entertainment , Deutsche Bank says. Analyst Brian Mullan upgraded shares of the restaurant and entertainment stock to a buy from a hold rating, saying in a note to clients that the “setup seems pretty decent” even in a bleak macro environment. “When we scan our restaurant coverage universe looking for opportunities, in what is still very much a tough macro (or in at least in what logically feels like it should be a very tough macro for consumer spending), we think the risk reward on PLAY stands out as fairly compelling at present,” Mullan wrote. Deutsche Bank also upped its price target on the stock to $48 a share, suggesting shares could rally nearly 30% in the months ahead. The stock has held up relatively better than the broader market this year, down just 3.5%. To be sure, Dave & Buster’s isn’t immune to a slowing macro environment, but Deutsche Bank believes the stock price is already reflecting that potential outcome. “And to the degree that PLAY can hold its recent top-line trends at least through the very important holiday time period, we can envision the stock outperforming a basket of its pure-play CDR peers (at a minimum), which is essentially our expectation with this upgrade,” Mullan said. — CNBC’s Michael Bloom contributed reporting
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