Wingstop Analyst Upgrades Amid Buyback, Sales Surge

Wingstop Inc WING recently entered into an accelerated share buyback agreement with Morgan Stanley to repurchase $125.0 million worth of common stock.

Checks suggest that the company’s same-store sales are tracking to exceed the consensus estimates for the third quarter and grow “in the 8%+ range, according to Wedbush.

The Wingstop Analyst: Nick Setyan upgraded the rating for Wingstop from Neutral to Outperform, while raising the price target from $180 to $200.

The Wingstop Thesis: Concerns around the challenging same-store sales comps in the first half of 2024 are “well understood,” Setyan said in the upgrade note.

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“WING is uniquely positioned within the industry to deliver transaction growth outperformance over the medium- to longer-term beyond 1H:24 in any macro backdrop,” the analyst wrote. “We now believe our 2024 net unit growth expectation of 12.2% could prove conservative, even in a higher wing cost environment,” he added.

The analyst raised the earnings estimate for 2023 from $2.23 per share to $2.27 per share “to reflect our higher Q4 SSS growth estimate and the recently announced $125M accelerated repurchase authorization.”

WING Price Action: Shares of Wingstop had risen by 1.24% to $175.90 at the time of publication Wednesday.

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