Wendys (WEN) Downgraded to Hold at Zacks Investment Research
According to Zacks, “Shares of Wendy’s have outperformed the industry in a year’s time. The company is expected to remain on its growth trajectory, after posting better-than-expected earnings in the first quarter of 2019. Earnings not only surpassed the Zacks Consensus Estimate but also increased 27.2% year over year, primarily favored by the positive effect of lower tax rate. Increase in adjusted EBITDA also boosted the reported quarter’s earnings. Revenues in the quarter grew on increased sales at company-operated restaurants. Menu innovation, increased investments in technology and reimaging of restaurants are expected to boost traffic and drive sales in the months ahead. Moreover, the company’s international business is poised to be a long-term growth driver. However, higher labor and commodity costs, along with capital spending, may dent margins.”
Several other equities analysts have also recently weighed in on the company. Stephens raised their price target on Wendys to $22.00 and gave the company an “overweight” rating in a report on Thursday, May 9th. BidaskClub upgraded Wendys from a “hold” rating to a “buy” rating in a report on Monday, April 1st. Wedbush restated a “hold” rating and set a $20.00 price target on shares of Wendys in a report on Wednesday, May 8th. Piper Jaffray Companies began coverage on Wendys in a report on Monday. They set an “overweight” rating and a $22.00 price target for the company. Finally, Bank of America set a $20.00 price target on Wendys and gave the company a “hold” rating in a report on Friday, May 10th. Nine analysts have rated the stock with a hold rating and thirteen have given a buy rating to the stock. The stock has a consensus rating of “Buy” and an average price target of $20.42.
Wendys (NASDAQ:WEN) last released its earnings results on Wednesday, May 8th. The restaurant operator reported $0.14 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.12 by $0.02. Wendys had a return on equity of 23.85% and a net margin of 29.16%. The firm had revenue of $408.60 million during the quarter, compared to analysts’ expectations of $398.58 million. During the same quarter last year, the business posted $0.11 earnings per share. The firm’s revenue was up 7.4% on a year-over-year basis. On average, research analysts predict that Wendys will post 0.63 earnings per share for the current fiscal year.
In related news, major shareholder Trian Fund Management, L.P. sold 3,000,000 shares of the firm’s stock in a transaction that occurred on Wednesday, March 6th. The stock was sold at an average price of $17.11, for a total transaction of $51,330,000.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, COO Robert D. Wright sold 126,629 shares of the firm’s stock in a transaction that occurred on Friday, May 10th. The stock was sold at an average price of $18.74, for a total value of $2,373,027.46. The disclosure for this sale can be found here. In the last quarter, insiders sold 3,244,636 shares of company stock valued at $55,884,654. Company insiders own 20.90% of the company’s stock.
Several hedge funds have recently modified their holdings of the stock. BlueMountain Capital Management LLC bought a new stake in shares of Wendys during the 1st quarter worth approximately $948,000. Maverick Capital Ltd. bought a new stake in Wendys during the 1st quarter valued at $6,940,000. Ladenburg Thalmann Financial Services Inc. raised its position in Wendys by 14.6% during the 1st quarter. Ladenburg Thalmann Financial Services Inc. now owns 13,502 shares of the restaurant operator’s stock valued at $234,000 after purchasing an additional 1,722 shares in the last quarter. Schonfeld Strategic Advisors LLC raised its position in Wendys by 82.1% during the 1st quarter. Schonfeld Strategic Advisors LLC now owns 100,389 shares of the restaurant operator’s stock valued at $1,797,000 after purchasing an additional 45,268 shares in the last quarter. Finally, Ellington Management Group LLC bought a new stake in Wendys during the 1st quarter valued at $714,000. 78.70% of the stock is owned by hedge funds and other institutional investors.
Wendys Company Profile
The Wendy's Company, together its subsidiaries, operates as a quick-service restaurant company. The company is involved in operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches. As of December 30, 2018, its restaurant system included 6,711 franchise restaurants, which comprise 353 owned and operated restaurants worldwide.
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