Dine Brands (DIN) Moves 8.3% Higher: Will This Strength Last?

Dine Brands (DIN) shares rallied 8.3% in the last trading session to close at $34.68. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 13.8% gain over the past four weeks.

Dine Brands shares climbed after reports emerged that investment firms Cobblers Cove Capital and Arkhouse Management had proposed acquiring the company for $39 per share in cash. The offer sparked investor optimism about a potential takeover, although a deal has yet to be finalized.

This parent company of Applebee's and IHOP restaurants is expected to post quarterly earnings of $1.07 per share in its upcoming report, which represents a year-over-year change of +46.6%. Revenues are expected to be $246.75 million, up 14.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Dine Brands, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DIN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Dine Brands is part of the Zacks Retail - Restaurants industry. McDonald's (MCD), another stock in the same industry, closed the last trading session 0.4% higher at $250.5. MCD has returned 6.6% in the past month.

McDonald's' consensus EPS estimate for the upcoming report has changed -0.2% over the past month to $3.36. Compared to the company's year-ago EPS, this represents a change of +4.4%. McDonald's currently boasts a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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