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Investing.com - Stifel lowered its price target on Wingstop (NASDAQ:WING) to $375.00 from $405.00 on Tuesday, while maintaining a Buy rating on the restaurant chain’s stock. The company, currently trading at $304.78, has demonstrated robust revenue growth of 22.7% over the last twelve months, with an impressive return on assets of 29.6%.
The price target reduction represents a $30 decrease from the investment firm’s previous valuation, though Stifel continues to express confidence in the company’s overall prospects.
Stifel’s new target price is based on a discounted cash flow analysis and implies Wingstop would trade at 37x EV/EBITDA NTM one year from now, compared to 36x currently.
The firm defended the premium valuation multiples as justified by Wingstop’s growth prospects and potential upward bias to same-restaurant sales and free cash flow estimates.
Despite the lower price target, Stifel’s maintained Buy rating suggests the firm remains positive on Wingstop’s future performance and investment potential.
In other recent news, Wingstop’s earnings and revenue have been a focal point for analysts. The company’s second-quarter earnings showed an earnings per share of $1.00, surpassing consensus estimates by $0.13, with restaurant margins exceeding expectations by 180 basis points. This performance prompted BMO Capital to raise its price target to $345, maintaining a Market Perform rating. Guggenheim also revised its price target upward to $410, citing a strong growth outlook and increased earnings per share estimates for 2025 and 2026.
Stifel adjusted its price target to $405, highlighting key initiatives discussed in Wingstop’s recent earnings call. Raymond James upgraded Wingstop to a Strong Buy, attributing the decision to the company’s Smart Kitchen system, despite some stock volatility. UBS raised its price target to $385, maintaining a Neutral rating, and noted softer same-store sales trends due to challenging comparisons. Collectively, these developments reflect a positive sentiment among analysts regarding Wingstop’s future prospects.
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