The Wendy's Company (WEN) - What Are Investment Firms Thinking About This Stock?

Key Points

• Analysts are broadly cautious: Eighteen firms give Wendy’s an average “Reduce” rating—six sells, eleven holds and one buy—with an average 12-month price target of $7.56.
• Wendy’s beat quarterly EPS expectations at $0.13 versus $0.09, but revenue fell year over year and earnings were below the year-ago level. Its new “Dave’s Way” plan aims to improve traffic, market share and restaurant profitability.
• The board rejected Trian’s $7.35-per-share buyout offer as undervaluing the company and adopted a limited-duration poison pill, leaving investors focused on the turnaround amid activist-related uncertainty.

Shares of The Wendy's Company (NASDAQ:WEN - Get Free Report) have been assigned an average recommendation of "Reduce" from the eighteen ratings firms that are currently covering the company, Marketbeat.com reports. Six analysts have rated the stock with a sell recommendation, eleven have assigned a hold recommendation and one has assigned a buy recommendation to the company. The average 1 year target price among brokerages that have issued a report on the stock in the last year is $7.56.

WEN has been the subject of a number of research analyst reports. Citigroup lifted their target price on Wendy's from $6.75 to $8.00 and gave the stock a "neutral" rating in a report on Friday. Seaport Research Partners started coverage on shares of Wendy's in a research note on Wednesday, September 16th. They issued a "neutral" rating on the stock. Stephens upped their price target on Wendy's from $7.00 to $8.00 and gave the stock an "equal weight" rating in a research note on Friday. Morgan Stanley set a $5.50 price target on shares of Wendy's in a research report on Monday, August 10th. Finally, Argus downgraded shares of Wendy's from a "buy" rating to a "sell" rating in a research report on Thursday, October 29th.

Institutional Trading of Wendy's

A number of hedge funds and other institutional investors have recently modified their holdings of WEN. Trian Fund Management L.P. acquired a new stake in Wendy's during the 2nd quarter worth $252,583,000. BlackRock Inc. boosted its stake in shares of Wendy's by 21.1% in the second quarter. BlackRock Inc. now owns 26,314,724 shares of the restaurant operator's stock worth $218,149,000 after buying an additional 4,576,075 shares during the last quarter. State Street Corp lifted its position in shares of Wendy's by 20.1% during the 2nd quarter. State Street Corp now owns 6,566,985 shares of the restaurant operator's stock worth $54,440,000 after purchasing an additional 1,101,063 shares during the last quarter. Bank of America Corp DE grew its position in shares of Wendy's by 5.6% in the first quarter. Bank of America Corp DE now owns 4,493,752 shares of the restaurant operator's stock valued at $31,232,000 after purchasing an additional 236,541 shares during the period. Finally, Healthcare of Ontario Pension Plan Trust Fund bought a new position in shares of Wendy's in the first quarter worth $26,062,000. Institutional investors own 85.96% of the company's stock.

Key Headlines Impacting Wendy's

Here are the key news stories impacting Wendy's this week:

• Positive Sentiment: Wendy’s reported third-quarter adjusted earnings of $0.13 per share, above analysts’ estimates, and launched its multi-year “Dave’s Way” plan to improve traffic, market share and restaurant profitability. Quarterly results and strategy
• Positive Sentiment: The company is refreshing its menu for 2027 and tailoring breakfast offerings by location after tests found that scaling back breakfast in some locations improved profitability. These moves could help the turnaround if they attract customers and lift margins. Menu refresh
• Positive Sentiment: Wendy’s is considering acquiring as many as 163 Meritage Hospitality Group restaurants, which could give it more control over locations and support its franchise portfolio strategy, though the deal is not final. Potential restaurant acquisition
• Neutral Sentiment: Citigroup and Stephens raised their price targets to $8, while keeping neutral and equal-weight ratings, respectively. Both targets are slightly below the cited share price, suggesting limited near-term upside in their views.
• Negative Sentiment: Despite the earnings beat, quarterly earnings were below the year-ago level and revenue declined year over year, underscoring the traffic and sales challenges the turnaround must address.
• Negative Sentiment: The board rejected Trian’s $7.35-per-share buyout proposal as undervaluing Wendy’s and adopted a limited-duration “poison pill.” The offer was below the cited recent share price, but blocking it leaves investors reliant on management’s turnaround and may prolong activist-related uncertainty. Buyout proposal rejection

Wendy's Stock Performance

Shares of WEN opened at $8.15 on Friday. The company's 50 day simple moving average is $6.95 and its 200-day simple moving average is $7.36. The firm has a market cap of $1.55 billion, a PE ratio of 15.98, a price-to-earnings-growth ratio of 1.33 and a beta of 0.37. The company has a current ratio of 1.90, a quick ratio of 1.88 and a debt-to-equity ratio of 27.95. Wendy's has a 12-month low of $5.94 and a 12-month high of $10.12.

Wendy's (NASDAQ:WEN - Get Free Report) last posted its earnings results on Thursday, November 5th. The restaurant operator reported $0.13 EPS for the quarter, topping the consensus estimate of $0.09 by $0.04. Wendy's had a net margin of 5.72% and a return on equity of 115.31%. The firm had revenue of $435.62 million during the quarter, compared to analysts' expectations of $531.28 million. During the same quarter in the prior year, the firm earned $0.24 EPS. Wendy's's quarterly revenue was down .5% on a year-over-year basis. As a group, equities analysts predict that Wendy's will post 0.50 EPS for the current year.

Wendy's Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be given a dividend of $0.07 per share. The ex-dividend date is Tuesday, December 1st. This represents a $0.28 dividend on an annualized basis and a yield of 3.4%. Wendy's's dividend payout ratio (DPR) is presently 42.42%.

About Wendy's

The Wendy's Company NASDAQ: WEN operates and franchises quick-service restaurants under the Wendy's brand. Its restaurants are known for hamburgers made with fresh, never-frozen beef, along with chicken sandwiches, salads, fries, breakfast items, desserts, and beverages.

Founded by Dave Thomas in 1969, Wendy's has grown into an international restaurant chain with locations primarily in the United States and Canada, as well as select markets in other countries. The company's restaurant system includes both company-operated and franchised locations.

In addition to its restaurant operations, Wendy's supports customers through digital ordering, delivery, loyalty programs, and mobile applications.

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