In a note released Tuesday morning, the team at Argus downgraded shares of The Wendy's Company (NASDAQ: WEN) from Buy to Hold and removed its $12 price target.
The Argus downgrade comes amid "weak" first quarter sales and the company's restaurant remodeling plan. Additionally, Wendy's management has said they will face margin pressure due to higher beef costs. As a result, Wendy's recently lowered its full year margin guidance from 16.8-17 percent to 16.3-16.8 percent.
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The firm says it could become more positive on the company if revenues were to rebound and if the company's remodeling plan proves to be more effective than expected.
Following the downgrade, Wendy's shares are trading ~2 percent lower around $8.45 in the pre-market.