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On Tuesday, BMO Capital Markets adjusted its price target for Wendy’s (NASDAQ:WEN) shares, reducing it to $15.00 from the previous $17.00, while keeping a Market Perform rating on the stock. The stock currently trades at $12.17, near its 52-week low of $12.05, having declined over 36% in the past six months. According to InvestingPro data, 20 analysts have recently revised their earnings expectations downward, with price targets ranging from $13 to $21. The adjustment comes in the wake of Wendy’s first-quarter earnings for 2025, which aligned with market expectations at $0.20 per share. This performance was attributed to a balance between softer comparable store sales (comps) and favorable general and administrative expenses alongside other income. Despite current challenges, Wendy’s maintains a strong dividend track record, having paid dividends consistently for 23 years, with a current yield of 4.47%.
Wendy’s has revised its full-year 2025 guidance downward, positioning it below the consensus, although it has reaffirmed its unit growth projections. This suggests an anticipation of modest declines in comparable store sales. The lower end of the company’s guidance is based on the assumption that the intensified consumer pressure observed in March will continue, a situation that is not without its risks.
BMO’s analyst noted that despite the potential for gains from new product launches, Wendy’s is expected to face challenges in comps and market share in the current market climate. The analyst also indicated that more time would be needed for Wendy’s to fully implement its long-term strategy. In light of these factors, the firm has reiterated its view that Wendy’s is less well positioned in a value-oriented environment compared to its competitors, leading to the reduced price target. For deeper insights into Wendy’s valuation and future prospects, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed financial health scores that help evaluate the company’s long-term potential.
In other recent news, Wendy’s reported its first-quarter 2025 earnings with earnings per share (EPS) of $0.20, aligning with analyst forecasts, but revenue fell short at $523.5 million against the anticipated $529.73 million. The company faced a decline in U.S. same-restaurant sales by 2.8%, although international sales showed resilience with a 2.3% increase. Loop Capital Markets adjusted their financial outlook for Wendy’s, reducing the price target to $21 from $26, but maintained a Buy rating, reflecting confidence in the company’s value proposition despite near-term challenges. Evercore ISI also revised its outlook, reducing the price target to $15 from $16 and adjusted its sales forecasts, anticipating slower growth in same-store sales for the upcoming quarters.
UBS maintained a Neutral rating on Wendy’s with a $14.00 target, citing weaker-than-expected same-store sales and a reduction in 2025 guidance due to macroeconomic challenges. Despite the challenges, Wendy’s has reaffirmed its strategic growth initiatives, focusing on strengthening U.S. same-store sales trends and meeting unit development targets. The company’s adjusted 2025 global system sales growth guidance has been lowered, primarily due to downward revisions to U.S. same-store sales growth targets. However, the outlook for international same-store sales and global unit development remains unchanged. Wendy’s aims for an adjusted EBITDA of $530-545 million for 2025, considering recent sales trends and strategic initiatives.
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