Wendy's Is Undervalued Compared To Peers, Analyst Says While Flagging Some Concerns

  • Argus Research analyst John Staszak upgraded The Wendy's Co WEN to Buy from Hold at a price target of $26
  • The analyst is bullish on the fast-food chain's store expansion, solid international growth, increased digital business investment, and a breakfast service focus.
  • Also, Staszak believes WEN shares are undervalued at 23x its 2023 EPS estimate, below the restaurant chains' peer average.
  • However, the analyst sees competitive pressure, commodity inflation, and higher labor and utility costs as a matter of concern. 
  • Last week, Wendy's reported first-quarter FY23 sales growth of 8.2% year-on-year to $528.81 million, beating the consensus of $522.43 million on strong international performance.
  • Post Q1 earnings, BMO Capital raised the price target on Wendy's to $24 from $23 at a Market Perform rating, and Credit Suisse increased the price target to $25 from $24 at a Neutral rating.
  • Also readWendy's Wants To Kiss Queues Goodbye With Underground AI-Powered Robot Deliveries
  • Price Action: Wendy's shares are trading higher by 0.15% at $23.54 on last check Friday.
  • Photo via Wikimedia Commons
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