UPDATE: RBC Capital Markets Initiates Coverage on Wendy's on Valuation, Uncertain Sales Trajectory

In a report published Friday, RBC Capital Markets analyst David Palmer initiated coverage on

with a Sector Perform rating and $8.50 price target. In the report, RBC Capital Markets noted, “Wendy's challenge as a mature concept will be to stay relevant in the eyes of a consumer who increasingly is finding better food value away from traditional fast food. We are bullish on the long-term effects of ‘Image Activation' (reimaging) and ‘System Optimization' (refranchising). However, the combination of valuation and an uncertain sales trajectory leaves us on the sidelines.” The Wendy's Company closed on Thursday at $8.05.