Wendy's Shares Are Inexpensive, But Will the Recovery Efforts Succeed?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16 hours ago
0mins
Source: Marketbeat
Wendy's Stock Performance: Wendy's stock is currently undervalued, trading at 12 times its earnings, presenting a potential opportunity for investors despite concerns about its ability to regain market share against competitors like McDonald's.
Management and Market Challenges: The company is addressing internal issues and recognizing past missteps, but faces challenges from declining U.S. comps and market share losses, which may impact its performance this year.
Analyst Sentiment: Analysts are generally bearish on Wendy's stock, with a high conviction rate for holding, but some trends indicate potential for a rebound, especially if earnings improve and cash flow strengthens.
Consumer Trends and Future Outlook: Early data suggests consumer spending may improve in 2026, supported by larger tax refunds, which could benefit Wendy's if they can enhance operational efficiency and revenue generation.
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Analyst Views on WEN
Wall Street analysts forecast WEN stock price to rise
20 Analyst Rating
2 Buy
14 Hold
4 Sell
Hold
Current: 7.480
Low
8.00
Averages
9.39
High
11.00
Current: 7.480
Low
8.00
Averages
9.39
High
11.00
About WEN
The Wendy’s Company is primarily engaged in the business of operating, developing and franchising a system of distinctive quick-service restaurants. The Company’s menu includes made-to-order square hamburgers using beef, and fan favorites like the Spicy Chicken Sandwich and nuggets, Baconator, and the Frosty dessert. Its segments include Wendy’s U.S., Wendy’s International and Global Real Estate & Development. Wendy’s U.S. includes the operation and franchising of its restaurants in the United States. Wendy’s International includes the operation and franchising of its restaurants in countries and territories other than the United States. Global Real Estate & Development includes real estate activity for owned sites and sites leased from third parties, which are leased and/or subleased to franchisees, and also includes its share of the income of its Canadian restaurant real estate joint venture (TimWen). The Company and its franchisees have over 7,000 restaurants worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Wendy's Reports Strong Q4 Results but Weak Outlook
- Earnings Highlights: Wendy's reported an adjusted EPS of 16 cents for Q4, surpassing the 14 cents estimate, with total revenues of $543 million exceeding the $535.99 million forecast, indicating resilience amid challenges.
- Net Income and EBITDA: The company achieved a net income of $26.5 million and a diluted GAAP EPS of 14 cents, with adjusted EBITDA reaching $113.3 million, reflecting progress in cost control and operational efficiency.
- Outlook Concerns: For 2026, Wendy's expects adjusted EPS between 56 cents and 60 cents, significantly below the 86 cents estimate, alongside projected adjusted EBITDA of $460 million to $480 million and free cash flow of $190 million to $205 million, highlighting future growth challenges.
- Analyst Rating Changes: BMO Capital lowered Wendy's price target from $11 to $9, while Evercore ISI Group cut its target from $9 to $8, indicating a cautious market sentiment regarding the company's future performance.
See More
Trian Fund Increases Stakes in Industrial and Healthcare Stocks
- Portfolio Adjustment: Trian Fund Management's latest 13F filing for Q4 2025 reveals an increase in stakes in major industrial and healthcare companies while trimming cyclical financial positions, indicating a cautious outlook on the economic landscape.
- Shift in Acquisition Strategy: Nelson Peltz hinted at a potential shift towards direct buyouts rather than traditional proxy fights, suggesting that this strategy could enable faster implementation of business strategies and enhance investment returns.
- Strong Performance of GE Aerospace: One of Trian's top bets, GE Aerospace, has benefited from robust demand in defense and commercial aviation, with strong order backlogs and ramped-up engine production, leading to a stock increase of over 55% in the past year, closing up 3.7% at $327.08.
- Market Trend Analysis: Benzinga's data indicates favorable price trends for GE Aerospace's stock across various time periods, along with strong Momentum and Quality rankings, reflecting sustained market confidence in the company's future prospects.
See More
Analysts Cut Wendy's Price Targets Following Earnings Miss
- Significant Stock Decline: Wendy's stock fell over 6% on Tuesday following analyst price target cuts, reflecting investor concerns about the company's future performance after its latest quarterly results missed expectations.
- Analyst Target Adjustments: At least ten analysts lowered their price targets after Wendy's fourth-quarter and full-year 2025 earnings release, with Goldman Sachs reducing its target from $8 to $7 and Morgan Stanley from $9 to $8, both maintaining sell ratings.
- Sales and Net Income Drop: Although Wendy's beat earnings expectations for the quarter, total sales fell 8% year-over-year to $3.4 billion, and non-GAAP net income plummeted 36% to $0.16 per share, indicating significant weakness in the company's fundamentals.
- Poor Future Outlook: Wendy's guidance for full-year 2026 non-GAAP net income is set at $0.56 to $0.60 per share, well below the consensus analyst estimate of $0.85, further exacerbating market pessimism regarding its growth prospects.
See More
Wendy's Stock Tests Key Support Levels Amid Weak Guidance
- Earnings Beat Expectations: Wendy's reported adjusted earnings of 16 cents per share on revenue of $543 million, slightly exceeding analyst expectations, despite an 11.3% drop in U.S. same-store sales and a decline in operating margins from 16.5% to 12.7%, indicating pressure from reduced traffic and rising food and labor costs.
- Weak 2026 Guidance: Management's 2026 outlook fell short of consensus, projecting adjusted EPS between 56 and 60 cents compared to Wall Street's expectation of 86 cents, with global systemwide sales expected to remain flat, raising concerns about the timeline for the company's turnaround plan, Project Fresh, to restore growth in its core U.S. market.
- Analysts Slash Targets: Following the earnings release, BMO Capital cut its price target from $11 to $9, while Evercore ISI lowered its target from $9 to $8, both maintaining neutral ratings, as short interest has climbed to over half of Wendy's freely traded shares, indicating a crowded bearish sentiment even at multi-year lows.
- Technical Indicators Signal Bearish Bias: The stock is currently trading 7.3% below its 20-day simple moving average and 15.5% below its 100-day SMA, with shares down 53.57% over the past year, positioned closer to 52-week lows than highs, while the neutral RSI and bearish MACD suggest mixed momentum and ongoing bearish pressure.
See More
Wall Street Opens Under AI Disruption Fears
- Tech Stocks Decline: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) fell over 2.7% in midday New York trading, marking its 11th decline in the past 15 sessions and pushing year-to-date losses to nearly 25%, reflecting ongoing investor concerns over potential AI-driven market disruptions.
- Nasdaq Underperformance: While broader equity indices were largely flat, the tech-heavy Nasdaq 100 slipped 0.3%, indicating a lack of confidence in the tech sector that may influence future investment decisions.
- Airline Stocks Rally: Airbnb Inc. (NASDAQ:ABNB) added 3.7%, extending last week's post-earnings momentum, while Southwest Airlines Co. (NYSE:LUV) jumped over 6% following analyst upgrades, suggesting a positive outlook for the airline industry's recovery.
- Commodity Market Decline: Following Iran's foreign minister's statement on reaching key principles with the U.S., crude oil fell 1.3% to $62 per barrel, while gold and silver dropped 2.5% and nearly 6%, respectively, indicating market reactions to geopolitical risks.
See More
Wendy's Shares Are Inexpensive, But Will the Recovery Efforts Succeed?
Wendy's Stock Performance: Wendy's stock is currently undervalued, trading at 12 times its earnings, presenting a potential opportunity for investors despite concerns about its ability to regain market share against competitors like McDonald's.
Management and Market Challenges: The company is addressing internal issues and recognizing past missteps, but faces challenges from declining U.S. comps and market share losses, which may impact its performance this year.
Analyst Sentiment: Analysts are generally bearish on Wendy's stock, with a high conviction rate for holding, but some trends indicate potential for a rebound, especially if earnings improve and cash flow strengthens.
Consumer Trends and Future Outlook: Early data suggests consumer spending may improve in 2026, supported by larger tax refunds, which could benefit Wendy's if they can enhance operational efficiency and revenue generation.
See More
Wendy's Reports Strong Q4 Results but Weak Outlook
- Earnings Highlights: Wendy's reported an adjusted EPS of 16 cents for Q4, surpassing the 14 cents estimate, with total revenues of $543 million exceeding the $535.99 million forecast, indicating resilience amid challenges.
- Net Income and EBITDA: The company achieved a net income of $26.5 million and a diluted GAAP EPS of 14 cents, with adjusted EBITDA reaching $113.3 million, reflecting progress in cost control and operational efficiency.
- Outlook Concerns: For 2026, Wendy's expects adjusted EPS between 56 cents and 60 cents, significantly below the 86 cents estimate, alongside projected adjusted EBITDA of $460 million to $480 million and free cash flow of $190 million to $205 million, highlighting future growth challenges.
- Analyst Rating Changes: BMO Capital lowered Wendy's price target from $11 to $9, while Evercore ISI Group cut its target from $9 to $8, indicating a cautious market sentiment regarding the company's future performance.
See More
Trian Fund Increases Stakes in Industrial and Healthcare Stocks
- Portfolio Adjustment: Trian Fund Management's latest 13F filing for Q4 2025 reveals an increase in stakes in major industrial and healthcare companies while trimming cyclical financial positions, indicating a cautious outlook on the economic landscape.
- Shift in Acquisition Strategy: Nelson Peltz hinted at a potential shift towards direct buyouts rather than traditional proxy fights, suggesting that this strategy could enable faster implementation of business strategies and enhance investment returns.
- Strong Performance of GE Aerospace: One of Trian's top bets, GE Aerospace, has benefited from robust demand in defense and commercial aviation, with strong order backlogs and ramped-up engine production, leading to a stock increase of over 55% in the past year, closing up 3.7% at $327.08.
- Market Trend Analysis: Benzinga's data indicates favorable price trends for GE Aerospace's stock across various time periods, along with strong Momentum and Quality rankings, reflecting sustained market confidence in the company's future prospects.
See More
Analysts Cut Wendy's Price Targets Following Earnings Miss
- Significant Stock Decline: Wendy's stock fell over 6% on Tuesday following analyst price target cuts, reflecting investor concerns about the company's future performance after its latest quarterly results missed expectations.
- Analyst Target Adjustments: At least ten analysts lowered their price targets after Wendy's fourth-quarter and full-year 2025 earnings release, with Goldman Sachs reducing its target from $8 to $7 and Morgan Stanley from $9 to $8, both maintaining sell ratings.
- Sales and Net Income Drop: Although Wendy's beat earnings expectations for the quarter, total sales fell 8% year-over-year to $3.4 billion, and non-GAAP net income plummeted 36% to $0.16 per share, indicating significant weakness in the company's fundamentals.
- Poor Future Outlook: Wendy's guidance for full-year 2026 non-GAAP net income is set at $0.56 to $0.60 per share, well below the consensus analyst estimate of $0.85, further exacerbating market pessimism regarding its growth prospects.
See More
Wendy's Stock Tests Key Support Levels Amid Weak Guidance
- Earnings Beat Expectations: Wendy's reported adjusted earnings of 16 cents per share on revenue of $543 million, slightly exceeding analyst expectations, despite an 11.3% drop in U.S. same-store sales and a decline in operating margins from 16.5% to 12.7%, indicating pressure from reduced traffic and rising food and labor costs.
- Weak 2026 Guidance: Management's 2026 outlook fell short of consensus, projecting adjusted EPS between 56 and 60 cents compared to Wall Street's expectation of 86 cents, with global systemwide sales expected to remain flat, raising concerns about the timeline for the company's turnaround plan, Project Fresh, to restore growth in its core U.S. market.
- Analysts Slash Targets: Following the earnings release, BMO Capital cut its price target from $11 to $9, while Evercore ISI lowered its target from $9 to $8, both maintaining neutral ratings, as short interest has climbed to over half of Wendy's freely traded shares, indicating a crowded bearish sentiment even at multi-year lows.
- Technical Indicators Signal Bearish Bias: The stock is currently trading 7.3% below its 20-day simple moving average and 15.5% below its 100-day SMA, with shares down 53.57% over the past year, positioned closer to 52-week lows than highs, while the neutral RSI and bearish MACD suggest mixed momentum and ongoing bearish pressure.
See More
Wall Street Opens Under AI Disruption Fears
- Tech Stocks Decline: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) fell over 2.7% in midday New York trading, marking its 11th decline in the past 15 sessions and pushing year-to-date losses to nearly 25%, reflecting ongoing investor concerns over potential AI-driven market disruptions.
- Nasdaq Underperformance: While broader equity indices were largely flat, the tech-heavy Nasdaq 100 slipped 0.3%, indicating a lack of confidence in the tech sector that may influence future investment decisions.
- Airline Stocks Rally: Airbnb Inc. (NASDAQ:ABNB) added 3.7%, extending last week's post-earnings momentum, while Southwest Airlines Co. (NYSE:LUV) jumped over 6% following analyst upgrades, suggesting a positive outlook for the airline industry's recovery.
- Commodity Market Decline: Following Iran's foreign minister's statement on reaching key principles with the U.S., crude oil fell 1.3% to $62 per barrel, while gold and silver dropped 2.5% and nearly 6%, respectively, indicating market reactions to geopolitical risks.
See More
Wendy's Shares Are Inexpensive, But Will the Recovery Efforts Succeed?
Wendy's Stock Performance: Wendy's stock is currently undervalued, trading at 12 times its earnings, presenting a potential opportunity for investors despite concerns about its ability to regain market share against competitors like McDonald's.
Management and Market Challenges: The company is addressing internal issues and recognizing past missteps, but faces challenges from declining U.S. comps and market share losses, which may impact its performance this year.
Analyst Sentiment: Analysts are generally bearish on Wendy's stock, with a high conviction rate for holding, but some trends indicate potential for a rebound, especially if earnings improve and cash flow strengthens.
Consumer Trends and Future Outlook: Early data suggests consumer spending may improve in 2026, supported by larger tax refunds, which could benefit Wendy's if they can enhance operational efficiency and revenue generation.
See More
