Loop Capital has revised its price target for Wendy’s (WEN, Financial) from $26 to $21 while maintaining a Buy rating on the stock. This decision follows the company's mixed first-quarter performance, highlighted by same-store sales falling short of expectations, although earnings per share met forecasts. The insights were shared in a recent note to investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for The Wendy's Co (WEN, Financial) is $15.38 with a high estimate of $26.00 and a low estimate of $13.00. The average target implies an upside of 22.51% from the current price of $12.55. More detailed estimate data can be found on the The Wendy's Co (WEN) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, The Wendy's Co's (WEN, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Wendy's Co (WEN, Financial) in one year is $22.65, suggesting a upside of 80.48% from the current price of $12.55. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Wendy's Co (WEN) Summary page.
WEN Key Business Developments
Release Date: May 02, 2025
- Global Same-Restaurant Sales: Declined 2.1%.
- US Same-Restaurant Sales: Decreased 2.8%.
- International Same-Restaurant Sales: Increased 2.3%.
- Global Systemwide Sales: Declined 1.1% on a constant currency basis.
- International Systemwide Sales Growth: 8.9%.
- New Restaurant Openings: 74 new restaurants globally, with over 60% international.
- Adjusted EBITDA: $124.5 million, a decrease of $3.3 million.
- Adjusted Earnings Per Share (EPS): $0.20, a decrease of $0.03 from the prior year.
- Free Cash Flow: $68 million under the new definition.
- Capital Expenditures: $17.7 million invested in the first quarter.
- Share Repurchases: 8.2 million shares for approximately $124 million in Q1.
- Dividend Payment: $0.14 per share for the second quarter.
- Full Year Global Systemwide Sales Outlook: Expected to range from down 2% to flat.
- Full Year Adjusted EBITDA Outlook: Between $530 million and $545 million.
- Full Year Adjusted EPS Outlook: $0.92 to $0.98.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Wendy's Co (WEN, Financial) opened 74 new restaurants globally in the first quarter, with over 60% of these openings occurring internationally, aligning with their long-term strategy.
- International same-restaurant sales grew by 2.3%, and systemwide sales increased by 8.9%, showcasing strong international performance.
- The company returned more than $173 million to shareholders through dividends and share repurchases, highlighting a commitment to shareholder value.
- The Wendy's Co (WEN) is investing in technology, including digital menu boards and AI order-taking, to enhance customer experience and restaurant productivity.
- The company is focused on strategic collaborations and innovations, such as the Thin Mint Frosty and upcoming Takis collaboration, to drive customer engagement and traffic.
Negative Points
- Global same-restaurant sales declined by 2.1%, leading to a 1.1% decrease in global system sales, reflecting challenges in the consumer environment.
- US same-restaurant sales were down 2.8%, driven by decreased traffic and adverse weather conditions impacting performance.
- The Wendy's Co (WEN) revised its full-year outlook, now anticipating global systemwide sales to be flat to down 2%, indicating a cautious approach due to market uncertainties.
- US company-operated restaurant margins contracted by 50 basis points year-over-year, affected by sales deleveraging, higher commodity costs, and wage inflation.
- The company faces pressure from a challenging consumer environment, with consumer confidence deteriorating and impacting demand, particularly among households earning below $75,000.
