Wendy's (NASDAQ:WEN) Stock Price Down 4.7% - Should You Sell?

Key Points

• Wendy’s shares fell 4.7% to about $6.22 in mid-day trading, substantially below both its 50-day and 200-day moving averages near $7.35.
• Analyst sentiment is cautious: the stock has a consensus “Reduce” rating, with 12 Holds and five Sells versus two Buys, and an average price target of $7.69.
• Although Wendy’s exceeded quarterly earnings and revenue expectations, its quarterly dividend was cut from $0.14 to $0.07 per share, reducing the annualized payout to $0.28 and yielding about 4.4%.

The Wendy's Company (NASDAQ:WEN - Get Free Report)'s share price dropped 4.7% during mid-day trading on Wednesday. The company traded as low as $6.25 and last traded at $6.2150. 550,063 shares were traded during trading, a decline of 95% from the average daily volume of 11,006,044 shares. The stock had previously closed at $6.52.

Analysts Set New Price Targets

A number of equities analysts have recently commented on WEN shares. KeyCorp reissued a "sector weight" rating on shares of Wendy's in a research report on Tuesday, August 11th. Seaport Research Partners initiated coverage on shares of Wendy's in a report on Wednesday, September 16th. They set a "neutral" rating for the company. Morgan Stanley set a $5.50 target price on shares of Wendy's in a research note on Monday, August 10th. UBS Group reiterated a "neutral" rating and issued a $8.00 target price on shares of Wendy's in a report on Monday, August 10th. Finally, Stephens cut their target price on shares of Wendy's from $8.00 to $7.00 and set an "equal weight" rating for the company in a research report on Thursday, October 15th. Two research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and five have assigned a Sell rating to the company. According to MarketBeat.com, the company currently has an average rating of "Reduce" and a consensus target price of $7.69.

Wendy's Trading Down 2.7%

The stock has a market capitalization of $1.21 billion, a price-to-earnings ratio of 9.61, a PEG ratio of 0.68 and a beta of 0.40. The company's 50 day moving average is $7.38 and its 200 day moving average is $7.35. The company has a debt-to-equity ratio of 27.95, a quick ratio of 1.88 and a current ratio of 1.90.

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

Wendy's Cuts Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st were given a dividend of $0.07 per share. This is a drop 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 4.4%. The ex-dividend date was Tuesday, September 1st. Wendy's's dividend payout ratio (DPR) is presently 42.42%.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of WEN. Global Retirement Partners LLC bought a new position in Wendy's in the 2nd quarter valued at $27,000. Cassaday & Co Wealth Management LLC bought a new stake in shares of Wendy's during the first quarter worth $30,000. Nykredit A S acquired a new stake in shares of Wendy's in the second quarter valued at $37,000. SJS Investment Consulting Inc. acquired a new stake in shares of Wendy's in the first quarter valued at $32,000. Finally, Hilton Head Capital Partners LLC increased its stake in shares of Wendy's by 57.7% in the first quarter. Hilton Head Capital Partners LLC now owns 5,687 shares of the restaurant operator's stock valued at $40,000 after buying an additional 2,080 shares in the last quarter. 85.96% of the stock is currently owned by institutional investors and hedge funds.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.