Wedbush Upgrades Wingstop, Says It Has Wings To Fly Higher In 2020 And Beyond

Wingstop Inc WING is scheduled to host an Investor Day presentation on Jan. 16 and management is likely to detail multiple catalysts that will translate to outperformance versus current expectations, according to Wedbush.

The Analyst

Nick Setyan upgraded Wingstop's stock from Neutral to Outperform with a price target lifted from $88 to $105.

The Thesis

Wingstop is sitting in an enviable position in the restaurant sector given its direct exposure to the growing popularity of chicken items and a focus on delivery, Setyan wrote in the note. This should help sustain same-store sales growth at industry-leading levels in 2020 and beyond.

In fact, Setyan thinks delivery alone could contribute more than 6% of incremental same-store sales in 2020 if management continues to focus on effective marketing programs. A Wedbush survey on all things delivery related found Wingstop's usage and awareness has room to improve versus its peers which implies a potential for sustained delivery growth.

The company's favorable positioning is also backed by three specific initiatives, including adding new delivery partners, growth in marketing spend and potential for increased throughput opportunities which were implemented in the U.K. market and now being tested in the domestic market.

Price Action

Shares of Wingstop traded higher by 3.3% to $87.58 at time of publication.

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Wedbush Downgrades Wingstop, Valuation Reflects Growth Momentum

Posted In: chickenfoodFood DeliveryNick SetyanWedbushAnalyst ColorLong IdeasUpgradesPrice TargetRestaurantsAnalyst RatingsTrading IdeasGeneral