Wendy’s (NASDAQ:WEN) Cut to “Sell” at Argus

Argus downgraded shares of Wendy’s (NASDAQ:WEN) from a buy rating to a sell rating in a report issued on Thursday, Marketbeat.com reports.

Several other research firms also recently commented on WEN. Morgan Stanley set a $5.50 price objective on Wendy’s in a report on Monday, August 10th. Guggenheim reaffirmed a “neutral” rating on shares of Wendy’s in a research report on Tuesday, September 15th. TD Cowen reiterated a “hold” rating and issued a $6.00 target price on shares of Wendy’s in a report on Wednesday. Weiss Ratings reissued a “sell (d+)” rating on shares of Wendy’s in a research report on Thursday, October 15th. Finally, Seaport Research Partners initiated coverage on Wendy’s in a research report on Wednesday, September 16th. They set a “neutral” rating on the stock. One equities research analyst has rated the stock with a Buy rating, eleven have given a Hold rating and six have assigned a Sell rating to the company’s stock. According to MarketBeat.com, Wendy’s has a consensus rating of “Reduce” and an average price target of $7.42.

Wendy’s Price Performance

Wendy’s stock opened at $7.21 on Thursday. The company has a debt-to-equity ratio of 27.95, a current ratio of 1.90 and a quick ratio of 1.88. The stock has a market cap of $1.37 billion, a price-to-earnings ratio of 10.92, a price-to-earnings-growth ratio of 1.32 and a beta of 0.40. The firm has a 50-day moving average of $7.06 and a two-hundred day moving average of $7.38. Wendy’s has a 1 year low of $5.94 and a 1 year high of $10.12.

Wendy’s (NASDAQ:WEN) last issued its earnings results on Friday, August 7th. The restaurant operator reported $0.18 EPS for the quarter, topping analysts’ consensus estimates of $0.16 by $0.02. Wendy’s had a net margin of 5.72% and a return on equity of 115.31%. The business had revenue of $570.57 million for the quarter, compared to analyst estimates of $557.13 million. During the same period last year, the company posted $0.29 earnings per share. The company’s quarterly revenue was up 1.8% compared to the same quarter last year. On average, research analysts forecast that Wendy’s will post 0.50 earnings per share for the current year.

Wendy’s Cuts Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 1st were given a dividend of $0.07 per share. The ex-dividend date of this dividend was Tuesday, September 1st. This is a negative change from Wendy’s’s previous quarterly dividend of $0.14. This represents a $0.28 annualized dividend and a dividend yield of 3.9%. Wendy’s’s payout ratio is currently 42.42%.

Institutional Trading of Wendy’s

A number of institutional investors have recently modified their holdings of WEN. Global Retirement Partners LLC acquired a new stake in Wendy’s in the 2nd quarter worth approximately $27,000. Cassaday & Co Wealth Management LLC acquired a new position in Wendy’s during the 1st quarter valued at approximately $30,000. Nykredit A S acquired a new position in Wendy’s during the 2nd quarter valued at approximately $37,000. SJS Investment Consulting Inc. acquired a new position in Wendy’s during the 1st quarter valued at approximately $32,000. Finally, Sterling Capital Management LLC increased its stake in Wendy’s by 630.5% during the 3rd quarter. Sterling Capital Management LLC now owns 5,245 shares of the restaurant operator’s stock valued at $33,000 after purchasing an additional 4,527 shares in the last quarter. 85.96% of the stock is currently owned by institutional investors.

Key Wendy’s News

Here are the key news stories impacting Wendy’s this week:

• Positive Sentiment: A Trian-led investor group offered approximately $7.35 per share to acquire Wendy’s, valuing the company at about $1.4 billion. The proposal gives shareholders a potential exit at a premium and has raised speculation that other bidders could emerge. Peltz Bids $1.4 Billion To Take Wendy’s Private Amid Burger Chain Woes
• Positive Sentiment: Investors view Peltz’s involvement as a possible turnaround catalyst for Wendy’s, which has struggled with declining traffic, competition and franchisee pressures. The possibility of private ownership could allow management to pursue longer-term restructuring without public-market scrutiny. Wendy’s Stock Jumps on Peltz Take-Private Bid
• Neutral Sentiment: Wendy’s is assessing the offer, while some market observers expect additional bids. A shareholder has urged the company to reject Peltz’s proposal, and analysts note that deal financing, regulatory review and board approval could prevent or delay a transaction. Shareholder Urges Wendy’s to Reject Peltz’s Offer
• Negative Sentiment: The offer is only modestly above Wendy’s recent trading level, limiting the immediate takeover premium and leaving investors exposed if negotiations fail. Argus also downgraded WEN from “buy” to “sell,” reflecting concerns about the company’s fundamentals.
• Negative Sentiment: Operating headwinds remain substantial: elevated beef costs, intense competition from Burger King and other chains, weak restaurant traffic, and a franchisee bankruptcy that could result in as many as 60 Wendy’s locations closing. Analysts also anticipate a year-over-year earnings decline. Wendy’s Franchisee to Close Up to 60 Locations in Bankruptcy

About Wendy’s

The Wendy’s Company (NASDAQ: WEN) operates and franchises quick-service restaurants under the Wendy’s brand. Its restaurants are known for hamburgers made with fresh, never-frozen beef, along with chicken sandwiches, salads, fries, breakfast items, desserts, and beverages.

Founded by Dave Thomas in 1969, Wendy’s has grown into an international restaurant chain with locations primarily in the United States and Canada, as well as select markets in other countries. The company’s restaurant system includes both company-operated and franchised locations.

In addition to its restaurant operations, Wendy’s supports customers through digital ordering, delivery, loyalty programs, and mobile applications.