Market Overview

Wendy's Strong Q3, Momentum Prompts Upgrade

Share:
Wendy's Strong Q3, Momentum Prompts Upgrade

Fast food chain Wendys Co (NASDAQ: WEN) reported third-quarter results that prompted BofA Securities analyst to turn bullish on the stock.

The Wendys Analyst: Gregory Francfort upgraded Wendys from Neutral to Buy with a price target lifted from $24 to $26.

The Wendys Thesis: Wendys' third-quarter report makes it clear the company is well-positioned to win market share in the restaurant space, Francfort wrote in the note. This was evident in the third-quarter report as the company continues to show impressive comps at a time when rival Mcdonald's Corp (NYSE: MCD) is showing strong sales.

Specifically, third-quarter EBITDA of $119 million exceeded estimates of $110 million while strong comps of 7% in the quarter continued into October at 6.6%.

Related Link: Wendy's: Q3 Earnings Insights

Meanwhile, Wendy's continued store remodeling process stands at more than 60% and should prove to be a catalyst to drive further share gains.

Francfort said management also deserves credit for keeping expenses low despite investments in new products and technology and last year's expansion into breakfast.

The research firm's revised $26 price target is based on a revised multiple of 19 times 2021 EV/EBITDA that is consistent with McDonald's target multiple.

WEN Price Action: Shares of Wendys were trading higher by 2.6% to $21.79 at publication time.

Latest Ratings for WEN

DateFirmActionFromTo
Nov 2020Northcoast ResearchUpgradesNeutralBuy
Nov 2020Credit SuisseMaintainsNeutral
Nov 2020MKM PartnersUpgradesNeutralBuy

View More Analyst Ratings for WEN
View the Latest Analyst Ratings

 

Related Articles (WEN)

View Comments and Join the Discussion!

Posted-In: BofA SecuritiesAnalyst Color Earnings News Upgrades Restaurants Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
KALUBenchmarkUpgrades
YEXTDA DavidsonMaintains20.5
BYDB of A SecuritiesMaintains47.0
SAICMorgan StanleyMaintains98.0
PVHMorgan StanleyMaintains104.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com