Wendy's Stock Gets Price Target Revisions After Q4 Earnings Beat: Retail Sentiment Upbeat

Wedbush raised Wendy's price target raised to $16 from $15.50 with a ‘Neutral’ rating

Shares of Wendy's Company ($WEN) rose more than 1% in after-hours trade on Friday evening after the fast food chain received price target revisions following better-than-expected quarterly earnings, lifting retail sentiment.

Wedbush raised Wendy's price target to $16 from $15.50 with a ‘Neutral’ rating, The Fly reported. The firm noted the company’s fourth-quarter (Q4) earnings per share results and better-than-expected consensus estimates of same-store sales growth.

Wendy's systemwide sales grew 5.4% in Q4 to $3.7 billion, including same-restaurant sales growth of 4.3%. For the full year, systemwide sales grew 3.1% to $14.5 billion, including same-restaurant sales growth of 1.5%, the company said.

Wendy's Q4 earnings per share came at $0.25, beating consensus estimates of $0.24, while revenue stood at $574.27 million, surpassing estimates of $563.59 million, according to Stocktwits data.

Sentiment on Stocktwits improved to ‘extremely bullish’ from ‘bullish’ a week ago. Message volume moved to ‘extremely high’ territory from ‘normal.’

Wendy’s capital allocation policy set a new target dividend payout ratio of 50% to 60% of adjusted earnings and included plans to repurchase up to $200 million of its shares in 2025.

"We are well positioned to accelerate growth, and we have a clear roadmap for Wendy's future. I am excited about the opportunities ahead of us as we strengthen our system across the globe,” said Kirk Tanner, president and CEO. Our new capital allocation policy will enable us to pursue these opportunities and maximize long-term shareholder value."

However, Barclays analyst Jeffrey Bernstein lowered the firm's price target to $16 from $17 with an ‘Equal’ Weight rating on the shares. 

The analyst noted Wendy’s Q4 comp and EBITDA were modestly above Wall Street estimates, driven by the October “SpongeBob SquarePants” collaboration, which includes a “Krabby Patty” meal from the iconic TV show.

According to the research firm, Wendy’s Q1 comp “will be negative on weather and macro headwinds,” added the report.

Wendy’s stock is down 12.27% year-to-date.

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