Where's The Beef? A Look Inside Wendy's Q3

Wendys Co WEN reported its third-quarter results which consisted of a top and bottom line miss. Management also revised its full year earnings per share outlook lower from a range of 45 cents to 47 cents per share to a new range of 43 cents and 45 cents per share.

The Analyst

Stephens' Will Slabaugh.

The Rating

Slabaugh maintains an Overweight rating on Wendys' stock with an unchanged $18 price target.

The Thesis

Although Wendys' earnings fell short of what Wall Street was modeling, the company is still showing "top-line consistency," Slabaugh said in a report. Specifically, Wendys' report marks the 19th consecutive quarter of positive comps in the North American segment. The ongoing momentum in the North American segment could be attributed to success in menu innovation, including the Giant JBC $5 Meal and ongoing brand marketing initiatives.

Looking forward to the fourth quarter, the restaurant company's guidance implies a 1 percent to 3 percent comp increase and the analyst noted he will be "looking for any color" on what will drive the gains.

Price Action

Shares of Wendys were trading lower by 7 percent at $13.61 ahead of Wednesday's opening bell.

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Image credit: Mike Mozart, Flickr