Nomura Hikes Wendy's Sales Outlook After 'Favorable' Burger Channel Checks

Nomura analyst Mark Kalinowski raised his first quarter same store sales forecast for Wendys Co

after "favorable" channel checks, sending its shares up 1 percent. The analyst, who has a Buy rating on Wendy's, increased his first quarter same-store sales projection for the company-owned restaurants by 30 basis points (bp) to +3.5%, which is 40bp above the consensus number at +3.1%. Kalinowski also raised his first quarter comps view for the franchised side of Wendy's by 100bp to +4.2%, a new sell-side high forecast in this regard, according to Consensus Metrix data. The consensus sell-side estimate is at +3.1%. "Based on our channel checks, we believe that Wendy's "4 for $4" bundled meal continues to prove popular, particularly in those geographic parts of the U.S. typically characterized as being "higher cost-of-living" areas," Kalinowski wrote in a note to clients. "Incidentally, it appears from our channel checks that the start of March was also favorable for Wendy's, which is another reason for our raised Q1 same-store sales projections," Kalinowski added. The company is expected to announce its first quarter results on May 11. Analysts' consensus estimate calls for earnings of 6 cents a share on revenue of $352.11 million. The analyst has a price target of $12.5 on WEN stock, which is up 1 percent at $9.47. WEN shares have declined about 12 percent this year.