Street Calls of the Week
Investing.com - Bernstein SocGen Group maintained its Market Perform rating and $12.00 price target on Wendy’s (NASDAQ:WEN), currently trading at $8.83 and down over 43% year-to-date, following the fast-food chain’s announcement of its new strategic initiative called Project Fresh. According to InvestingPro analysis, Wendy’s is currently trading below its Fair Value, with 10+ additional insights available to subscribers.
Project Fresh focuses on brand revitalization, system optimization, operational excellence, and capital allocation, shifting priority from unit growth to improving average unit volume and franchisee profitability. The company maintains strong fundamentals with a healthy current ratio of 1.45 and has consistently paid dividends for 23 consecutive years, currently offering a significant 6.34% yield.
The Wendy’s board continues its CEO selection process, which is expected to be completed by the end of 2025, according to Bernstein analyst Danilo Gargiulo.
Bernstein believes the plan’s core elements align with their expectations, noting that bringing focus back to brand strength and franchisee profitability will make the system more sustainable long-term.
The firm expects Project Fresh to result in lower near-term guidance for same-store sales growth and net unit growth, as the plan may include allowing franchisees to opt out of breakfast service, increasing investments in labor training, equipment and technology, and eliminating promotions that boost sales at the expense of profitability.
In other recent news, Wendy’s reported its second-quarter earnings for 2025, surpassing market expectations. The company achieved an adjusted earnings per share of $0.29, exceeding the forecasted $0.26, and reported revenue of $560.9 million, slightly above the expected $558.31 million. These results demonstrate an 11.54% positive surprise in earnings. Additionally, Wendy’s has launched Project Fresh, a strategic plan to revitalize the brand and boost profitability. The initiative focuses on brand revitalization, system optimization, operational excellence, and capital reallocation, with the assistance of industry consultancy Creed UnCo. In another development, Truist Securities reaffirmed its Buy rating on Wendy’s stock, maintaining a $13 price target. The firm expressed increased confidence in Wendy’s management team after meetings with key company executives. These recent developments highlight Wendy’s efforts to strengthen its financial performance and market position.
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