Wendy's (NASDAQ:WEN) Trading Down 4.3% - What's Next?

Key Points

• Wendy’s shares fell 4.3% to about $7.89, with trading volume down sharply to 1.64 million shares versus an average of 12.05 million.
• Analyst sentiment remains cautious: the stock has a consensus “Reduce” rating, with 13 Hold, six Sell and two Buy ratings, and an average price target of $7.78.
• Wendy’s beat quarterly earnings and revenue estimates, but earnings declined year over year; the company declared a quarterly dividend of $0.07, equivalent to a 3.6% yield, while institutional investors own nearly 86% of the stock.

The Wendy's Company (NASDAQ:WEN - Get Free Report)'s share price fell 4.3% on Thursday . The company traded as low as $7.86 and last traded at $7.8860. 1,639,519 shares were traded during mid-day trading, a decline of 86% from the average daily volume of 12,047,795 shares. The stock had previously closed at $8.24.

Wall Street Analysts Forecast Growth

Several research analysts have recently weighed in on the company. TD Cowen reaffirmed a "hold" rating and set a $6.00 price objective on shares of Wendy's in a research report on Tuesday, May 12th. JPMorgan Chase & Co. restated an "underweight" rating and set a $6.00 price objective (down from $7.00) on shares of Wendy's in a research note on Monday, May 11th. Wall Street Zen raised Wendy's from a "sell" rating to a "hold" rating in a report on Saturday, May 16th. UBS Group restated a "neutral" rating and set a $8.00 price objective on shares of Wendy's in a report on Monday, August 10th. Finally, Argus raised Wendy's from a "hold" rating to a "buy" rating and set a $12.00 price target for the company in a report on Wednesday, May 13th. Two research analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and six have given a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Reduce" and an average price target of $7.78.

Wendy's Stock Performance

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 company has a 50-day moving average price of $7.98 and a two-hundred day moving average price of $7.47. The stock has a market capitalization of $1.50 billion, a P/E ratio of 11.92, a price-to-earnings-growth ratio of 0.84 and a beta of 0.39.

Wendy's (NASDAQ:WEN - Get Free Report) last posted its earnings results on Friday, August 7th. The restaurant operator reported $0.18 earnings per share for the quarter, topping the consensus estimate of $0.16 by $0.02. The firm had revenue of $570.57 million during the quarter, compared to the consensus estimate of $557.13 million. Wendy's had a net margin of 5.72% and a return on equity of 115.31%. The company's revenue was up 1.8% on a year-over-year basis. During the same quarter last year, the company earned $0.29 earnings per share. On average, equities analysts forecast that The Wendy's Company will post 0.5 earnings per share for the current year.

Wendy's Cuts Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st will be issued a $0.07 dividend. This represents a $0.28 annualized dividend and a dividend yield of 3.6%. The ex-dividend date of this dividend is Tuesday, September 1st. Wendy's's payout ratio is 42.42%.

Hedge Funds Weigh In On Wendy's

A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Trian Fund Management L.P. purchased a new position in shares of Wendy's during the second quarter worth about $252,583,000. Healthcare of Ontario Pension Plan Trust Fund acquired a new stake in shares of Wendy's in the 1st quarter valued at about $26,062,000. Renaissance Technologies LLC grew its stake in Wendy's by 2,612.4% during the 1st quarter. Renaissance Technologies LLC now owns 2,340,282 shares of the restaurant operator's stock worth $16,265,000 after buying an additional 2,254,000 shares during the last quarter. Bank of America Corp DE increased its position in Wendy's by 5.6% during the first quarter. Bank of America Corp DE now owns 4,493,752 shares of the restaurant operator's stock worth $31,232,000 after buying an additional 236,541 shares during the period. Finally, Jupiter Topco LLC purchased a new stake in Wendy's in the second quarter valued at approximately $12,675,000. Institutional investors own 85.96% of the company's stock.

About Wendy's

The Wendy's Company NASDAQ: WEN operates as a global quick-service restaurant chain, best known for its square-shaped beef patties, fresh ingredient sourcing and signature Frosty dessert. The company's menu features a variety of hamburgers, chicken sandwiches, salads, breakfast sandwiches, sides and beverages, designed to appeal to a broad customer base seeking both classic and contemporary fast-food options. Wendy's has placed particular emphasis on product innovation, introducing limited-time offerings and revamped core menu items to maintain customer interest and respond to evolving dining trends.

Founded in 1969 by entrepreneur Dave Thomas in Columbus, Ohio, Wendy's expanded rapidly through both company-owned and franchised outlets.

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