Wendys (WEN) Downgraded to Hold at Zacks Investment Research
According to Zacks, “Shares of Wendy’s have outperformed the industry in a year’s time. The company is expected to remain on its growth trajectory, after posting better-than-expected earnings in the first quarter of 2019. Earnings not only surpassed the Zacks Consensus Estimate but also increased 27.2% year over year, primarily favored by the positive effect of lower tax rate. Increase in adjusted EBITDA also boosted the reported quarter’s earnings. Revenues in the quarter grew on increased sales at company-operated restaurants. Menu innovation, increased investments in technology and reimaging of restaurants are expected to boost traffic and drive sales in the months ahead. Moreover, the company’s international business is poised to be a long-term growth driver. However, higher labor and commodity costs, along with capital spending, may dent margins.”
Several other equities research analysts have also commented on the stock. Piper Jaffray Companies began coverage on shares of Wendys in a research note on Monday, May 13th. They issued an overweight rating and a $22.00 price objective for the company. Bank of America set a $20.00 price objective on shares of Wendys and gave the company a hold rating in a research note on Friday, May 10th. Stephens increased their price objective on shares of Wendys to $22.00 and gave the company an overweight rating in a research note on Thursday, May 9th. BMO Capital Markets increased their price objective on shares of Wendys from $19.00 to $21.00 and gave the company an outperform rating in a research note on Thursday, May 9th. Finally, Wedbush reiterated a hold rating and issued a $20.00 price objective on shares of Wendys in a research note on Wednesday, May 8th. Nine research analysts have rated the stock with a hold rating and thirteen have assigned a buy rating to the company’s stock. The company currently has an average rating of Buy and a consensus target price of $20.42.
Wendys (NASDAQ:WEN) last posted its quarterly earnings data on Wednesday, May 8th. The restaurant operator reported $0.14 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.12 by $0.02. The firm had revenue of $408.60 million during the quarter, compared to analyst estimates of $398.58 million. Wendys had a net margin of 29.16% and a return on equity of 23.85%. The company’s revenue for the quarter was up 7.4% on a year-over-year basis. During the same quarter last year, the business posted $0.11 EPS. Equities analysts forecast that Wendys will post 0.63 earnings per share for the current year.
The business also recently announced a quarterly dividend, which will be paid on Monday, June 17th. Stockholders of record on Monday, June 3rd will be given a dividend of $0.10 per share. This represents a $0.40 dividend on an annualized basis and a dividend yield of 2.14%. The ex-dividend date of this dividend is Friday, May 31st. Wendys’s dividend payout ratio is currently 67.80%.
In other news, major shareholder Trian Fund Management, L.P. sold 3,000,000 shares of the stock in a transaction that occurred on Wednesday, March 6th. The shares were sold at an average price of $17.11, for a total transaction of $51,330,000.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, COO Robert D. Wright sold 126,629 shares of the stock in a transaction that occurred on Friday, May 10th. The shares were sold at an average price of $18.74, for a total transaction of $2,373,027.46. The disclosure for this sale can be found here. Insiders have sold a total of 3,699,429 shares of company stock valued at $64,343,804 over the last three months. Insiders own 20.90% of the company’s stock.
Institutional investors have recently added to or reduced their stakes in the company. Rockefeller Capital Management L.P. boosted its holdings in Wendys by 330.9% in the 1st quarter. Rockefeller Capital Management L.P. now owns 1,409 shares of the restaurant operator’s stock worth $25,000 after buying an additional 1,082 shares during the period. Enlightenment Research LLC bought a new position in Wendys in the 4th quarter worth approximately $28,000. O Shaughnessy Asset Management LLC bought a new position in Wendys in the 1st quarter worth approximately $58,000. Clarfeld Financial Advisors LLC bought a new position in Wendys in the 4th quarter worth approximately $94,000. Finally, Citizens Financial Group Inc RI bought a new position in Wendys in the 1st quarter worth approximately $107,000. 78.70% of the stock is owned by hedge funds and other institutional investors.
Wendys Company Profile
The Wendy's Company, together its subsidiaries, operates as a quick-service restaurant company. The company is involved in operating, developing, and franchising a system of quick-service restaurants specializing in hamburger sandwiches. As of December 30, 2018, its restaurant system included 6,711 franchise restaurants, which comprise 353 owned and operated restaurants worldwide.
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