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Investing.com - Barclays (LON:BARC) has lowered its price target on Wendy’s (NASDAQ:WEN) stock to $11.00 from $13.00 while maintaining an Equalweight rating, citing ongoing challenges for the fast-food chain. The stock currently trades at $9.97, down 37% year-to-date, though InvestingPro analysis suggests the stock may be undervalued at current levels.
The research firm noted that the first half of 2025 has been particularly difficult for Wendy’s, even more so than the broader quick-service restaurant sector. Barclays expects these headwinds to continue through the second half of the year, with July sales already showing a slowdown from second-quarter levels and fourth-quarter comparisons presenting the toughest challenge of the year. Despite these challenges, the company maintains a solid 5.62% dividend yield and has consistently paid dividends for 23 consecutive years.
Wendy’s has recently reduced its full-year 2025 guidance again, which Barclays described as a prudent move given the circumstances. The company’s newfound strategic changes remain unproven, and franchisees appear concerned about declining profitability.
The recent management changes, including the surprise departure of Wendy’s CEO and US president, raise questions about potential fundamental volatility and a reset of expectations. Barclays acknowledged the interim CEO’s efforts to stabilize performance amid these challenges. For deeper insights into Wendy’s management stability and financial health metrics, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
On valuation, Barclays noted that Wendy’s is trading at approximately 8 times 2026 estimated EBITDA, compared to its three-year forward average of about 12 times and the quick-service restaurant sector average of around 14 times (excluding Wendy’s). The stock currently trades at a P/E ratio of 10.54x, with detailed valuation metrics and Fair Value estimates available through InvestingPro’s comprehensive research reports.
In other recent news, Wendy’s has been the subject of several analyst assessments and company developments. UBS has lowered its price target for Wendy’s to $11, citing sales pressures and a challenging macro environment that could impact growth visibility into 2025. Similarly, TD Cowen also reduced its price target to $11, maintaining a Hold rating due to concerns about the industry environment affecting the fast-food chain. Evercore ISI, however, maintained its In Line rating with a $14 price target, emphasizing the need for strong execution in marketing and innovation in the fast-food sector.
Loop Capital adjusted its price target to $16 from $21, while retaining a Buy rating, following reports of a decline in U.S. same-store sales. In terms of leadership changes, Wendy’s announced the appointment of Pete Suerken as President of its U.S. operations. Suerken, who has been with Wendy’s Quality Supply Chain Co-op since 2021, will now report to interim CEO Ken Cook. These developments come as Wendy’s navigates a competitive fast-food landscape with various strategic adjustments.
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