Wingstop (WING) faces a weaker near-term outlook with a likely fiscal Q1 miss as consumer pressures weigh on demand, though the long-term opportunity remains intact, Morgan Stanley said in a Monday note.

The investment firm expects Q1 same-store sales to decline 6.3%. This compares with its prior forecast for a 3.9% drop and Street expectations for a 4.5% decline. The outlook reflects weaker traffic, weather disruptions and cautious spending by its core customers.

Wingstop's higher-priced positioning is under pressure from increased promotions and exposure to key markets and higher gas prices also add headwinds. Unit growth remains a key driver. However, some franchisees may delay openings amid softer sales even as long-term fundamentals remain intact.

The brokerage said it sees no evidence of brand impairment and believes investor sentiment has become overly pessimistic. Marketing, loyalty initiatives and the Smart Kitchen rollout could support performance, according to the note.

Morgan Stanley maintained its overweight rating on the stock and lowered its price target to $265 from $345.

Shares of Wingstop were up nearly 6% in Monday trading.

Price: 161.42, Change: +8.91, Percent Change: +5.84