Wendy's Focus on Operations and Technology is Encouraging, Truist Says

MT Newswires Live
Aug 12

Wendy's (WEN) focus on operations, technology, and progress with development is encouraging, Truist Securities said in a note Monday.

The marketing mistakes and a challenging macro has resulted in significant pressure on the company's same-store sales, the analyst firm said. Any positive news, including a permanent CEO, could drive the stock upside, Truist added.

The firm now projects 2025 adjusted earnings before interest, taxes, depreciation, and amortization of $515.2 million, within the company's revised guidance of $505 to $525 million, and sees 2026 adjusted EBITDA of $537.4 million, down from prior estimates of $527.6 million and $550.8 million, respectively.

The company has lowered its 2025 US restaurant-level margin guidance, due to weaker sales and higher commodity inflation and raising the inflation expectations to 4% from 2.5% previously. The RLM estimate for 2025 and 2026 have been cut to 13.9% and 14.2% from 14.1% and 14.3%, respectively, the report added.

Despite same-store sales pressure, the company maintained its 2025 development guidance of 2% to 3% net unit growth where, Truist now forecasts 2025 net unit growth of 2.7% and 2026 growth of 3.0%.

The firm maintained its buy rating on the stock and lowered its price target to $13 from $14, citing macro risks and competitive pressures.

Shares of the company were up more than 2.8% in recent Monday trading.

Price: 10.39, Change: +0.30, Percent Change: +2.92

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