Bernstein analyst Danilo Gargiulo has maintained their neutral stance on WEN stock, giving a Hold rating on August 8.
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Danilo Gargiulo has given his Hold rating due to a combination of factors impacting Wendy’s performance. The company’s recent same-store sales growth was disappointing, with a notable decline in consumer spending, particularly among low-income customers. This trend has led to a reduction in global sales growth guidance and EBITDA projections, reflecting the challenges Wendy’s faces in a competitive market.
Despite international markets showing potential for growth, the domestic business struggles with traffic pressure and profitability concerns among franchisees. The management’s strategic shift towards a ‘less is more’ approach in marketing is promising, but it will take time to yield noticeable improvements in customer traffic. Additionally, the valuation of Wendy’s stock appears attractive, yet the company needs to demonstrate tangible progress in its strategic initiatives to close the valuation gap with its peers. Therefore, the Hold rating reflects caution amid these uncertainties.
According to TipRanks, Gargiulo is an analyst with an average return of -4.8% and a 33.78% success rate. Gargiulo covers the Consumer Cyclical sector, focusing on stocks such as Starbucks, Chipotle, and Wendy’s.
In another report released on August 8, Evercore ISI also reiterated a Hold rating on the stock with a $14.00 price target.