AnalystConsensusTarget updated the narrative for WEN

Wendy's fair value estimate has been reduced from $11.86 to $11.36 per share, as analysts cite a series of recent price target cuts resulting from choppy sales trends, competitive pressures, and ongoing leadership and marketing concerns.

Analyst Commentary

Recent analyst assessments of Wendy's have highlighted both potential positives and ongoing challenges for the company. The sentiment has generally trended cautious, with new price targets reflecting shifting expectations around sales momentum, execution, and market positioning.

• Despite a more cautious outlook for near-term growth, some analysts see Wendy's current valuation as already reflecting lowered expectations. This could help protect against further downside in the stock price.
• Wendy's fiscal second quarter earnings exceeded estimates on favorable general and administrative expenses. This indicates that there are areas of the business where management is executing well.
• A continued focus on value offerings has provided some sales support, with modest benefits observed during promotional periods.

• Many analysts flagged significant same-store sales slowdowns in recent quarters. Choppy demand and traffic trends have led to downward revisions in growth projections and price targets.
• Persistent leadership turnover and ongoing marketing challenges have raised concerns about the company’s ability to execute on new strategies and roll out launches. Some see a "leadership vacuum" as a core issue.
• Competitive pressures remain a headwind, especially as major peers ramp up aggressive value strategies. This results in share loss risks for Wendy's in the near term.
• Recent cuts to future financial guidance and lower marketing spend have signaled a tougher path for regaining market share and reinvigorating sales momentum.

What's in the News

• Piper Sandler lowered its price target on Wendy's shares to $13 from $15 and maintained an Overweight rating. (Piper Sandler)
• Barclays reduced its price target on Wendy's to $11 from $13, citing persistent company headwinds, slowing July sales, and franchisee concerns about profitability. (Barclays)
• Wendy's revised its 2025 earnings guidance downward and now expects global systemwide sales growth between (5.0)% and (3.0)% instead of the prior range of (2.0)% to flat. (Company Guidance)
• Wendy's introduced new Chicken Tenders nationwide, complemented by six new dipping sauces and specialty "Tendy's" packaging at select locations. (Product Launch)
• The company completed a share repurchase tranche, buying back 5.6 million shares from March 31 to August 1 for $70.8 million as part of its ongoing buyback program. (Company Buyback)

Valuation Changes

• The Fair Value Estimate has decreased modestly from $11.86 to $11.36 per share.
• The Discount Rate remains unchanged at 12.32%.
• Revenue Growth assumptions have declined slightly, from 1.21% to 1.16%.
• The Net Profit Margin forecast is nearly unchanged, moving marginally from 9.12% to 9.11%.
• The Future P/E Ratio has decreased from 12.38x to 11.90x, reflecting updated expectations.