Wendy's (NASDAQ:WEN) Sets New 12-Month Low - Time to Sell?

Key Points

• Wendy’s shares fell to a new 52-week low of $5.95, trading around $6.01 and well below their 50-day and 200-day moving averages.
• Analyst sentiment is largely cautious: the stock has a consensus “Reduce” rating, with 13 Holds and five Sells, and an average price target of $7.82.
• The company beat quarterly earnings and revenue expectations, but cut its quarterly dividend in half to $0.07; institutional investors own nearly 86% of the shares.

The Wendy's Company (NASDAQ:WEN - Get Free Report)'s stock price hit a new 52-week low during mid-day trading on Monday. The company traded as low as $5.95 and last traded at $6.0080, with a volume of 795671 shares changing hands. The stock had previously closed at $6.12.

Wall Street Analyst Weigh In

A number of equities analysts have weighed in on the company. Stephens reissued an "equal weight" rating and issued a $8.00 target price on shares of Wendy's in a research report on Tuesday, June 23rd. Morgan Stanley set a $5.50 price objective on shares of Wendy's in a report on Monday, August 10th. Weiss Ratings restated a "sell (d+)" rating on shares of Wendy's in a research report on Friday, July 17th. BMO Capital Markets restated a "market perform" rating on shares of Wendy's in a report on Monday, August 10th. Finally, Seaport Research Partners assumed coverage on shares of Wendy's in a research report on Wednesday, September 16th. They issued a "neutral" rating for the company. Two analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and five have given a Sell rating to the company. Based on data from MarketBeat, the company has a consensus rating of "Reduce" and an average price target of $7.82.

Wendy's Stock Down 1.9%

The company has a current ratio of 1.90, a quick ratio of 1.88 and a debt-to-equity ratio of 27.95. The stock has a market cap of $1.14 billion, a P/E ratio of 9.10, a PEG ratio of 0.63 and a beta of 0.40. The company's 50 day moving average price is $7.66 and its two-hundred day moving average price is $7.40.

Wendy's (NASDAQ:WEN - Get Free Report) last announced its earnings results on Friday, August 7th. The restaurant operator reported $0.18 EPS for the quarter, beating analysts' consensus estimates of $0.16 by $0.02. Wendy's had a net margin of 5.72% and a return on equity of 115.31%. The business had revenue of $570.57 million during the quarter, compared to analysts' expectations of $557.13 million. During the same period in the prior year, the company earned $0.29 earnings per share. The firm's revenue was up 1.8% on a year-over-year basis. Equities analysts forecast that The Wendy's Company will post 0.49 earnings per share for the current year.

Wendy's Cuts Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 1st were given a $0.07 dividend. The ex-dividend date was Tuesday, September 1st. This is a decrease from Wendy's's previous quarterly dividend of $0.14. This represents a $0.28 dividend on an annualized basis and a dividend yield of 4.7%. Wendy's's dividend payout ratio (DPR) is currently 42.42%.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of WEN. Envestnet Asset Management Inc. raised its holdings in Wendy's by 62.6% during the second quarter. Envestnet Asset Management Inc. now owns 74,030 shares of the restaurant operator's stock valued at $614,000 after acquiring an additional 28,508 shares during the period. State Street Corp lifted its holdings in Wendy's by 20.1% in 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 in the last quarter. The Manufacturers Life Insurance Company boosted its stake in Wendy's by 130.0% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 86,902 shares of the restaurant operator's stock worth $720,000 after purchasing an additional 49,124 shares during the period. WINTON GROUP Ltd boosted its stake in Wendy's by 48.8% in the 2nd quarter. WINTON GROUP Ltd now owns 291,578 shares of the restaurant operator's stock worth $2,417,000 after purchasing an additional 95,596 shares during the period. Finally, NewEdge Advisors LLC grew its holdings in Wendy's by 1,557.9% during the 2nd quarter. NewEdge Advisors LLC now owns 12,832 shares of the restaurant operator's stock valued at $106,000 after buying an additional 12,058 shares in the last quarter. Institutional investors own 85.96% of the company's stock.

Wendy's Company Profile

Wendy's Co NASDAQ: WEN operates and franchises the Wendy's quick-service restaurant chain. Its menu primarily features hamburgers made with fresh, never-frozen beef, along with chicken sandwiches, nuggets, salads, french fries, breakfast items, beverages and the signature Frosty dessert.

Founded by Dave Thomas in Columbus, Ohio, in 1969, Wendy's has grown into an international restaurant brand. The company serves customers through a network of company-operated and franchised restaurants, with a significant presence in the United States and additional locations in international markets.

In addition to restaurant sales, Wendy's supports ordering through digital channels, including its mobile application and website, as well as delivery services.

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