As previously reported, Piper Sandler downgraded Driven Brands to Neutral from Overweight with a price target of $12, down from $19, following an 8-K filing announcing a substantial number of material errors in the company's reported results over the last three years. While the firm doesn't like downgrading stocks with an over 30% selloff in a single day, Piper says it can't recommend shares at this level for several reasons. First, this represents the second over 30% one-day selloff in less than years. Second, there have been yellow flags in reported numbers including an unrelenting amount of EBITDA adjustments. Finally, overall fundamentals are a bit sluggish, the firm adds.
