Earnings Beat Drives DIN Stock Higher

Dine Brands stock hit a four-year high earlier today

Lillian Currens
Feb 24, 2020 at 12:15 PM
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The shares of Dine Brands Global Inc (NYSE:DIN) are bucking the broadmarket trend, and earlier surged to a four-year high of $104.46, following this morning's fourth-quarter earnings release. The Applebee's parent posted profits of $1.78 per share, which beat analyst's expectations, brushing off its revenue miss of $227.51 million. The firm cited lower administrative costs as a key factor behind the beat.

The stock is up 1.1% at $98.32 at last check, continuing an impressive climb higher. In fact, since its early October bottom of $68.02, DIN has added 44.5%, with several pullbacks deftly captured by the 40-day moving average. Now, the equity is attempting to conquer the $99 region, which has acted as a long-term ceiling on the charts for the last 12 months. 

DIN Chart Feb 24

The earnings beat has attracted plenty of options players to the table. The typically quiet options pits have seen 289 calls and 811 puts exchange hands so far, which is nine times what's typically seen at this point. The most popular contract is by far the March series, with positions being opened at the 80 put and the 105 call. 

Analysts have yet to chime in, but it looks like most of the seven in coverage are already quite bullish, with only one calling DIN a "hold." On the other hand, the consensus 12-month price target of $98.11 is directly in line with the equity's current level. 

Despite its recent behavior on the charts, short interest has inched higher in the last two reporting periods. The 1.19 million shares sold short represent 12.1% of the stock's available float, too, and at DIN's average pace of trading it would take nine days to buy back all these bearish bets. Should some of this pessimism begin to unwind, a short squeeze could put some additional wind at the equity's back. 


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