Guggenheim downgrades Wendy’s, argues ‘strategic rethink’ needed

As previously reported, Guggenheim downgraded Wendy’s (WEN) to Neutral from Buy and removed the firm’s prior $22 price target The company needs a strategic rethink on the priorities of unit growth versus franchisee profitability, argues the analyst, who thinks the global 3%-4% unit growth target needs to be re-assessed to prioritize domestic same-store sales and franchisee cash-on-cash returns. With the stock trading at “a cheap valuation,” the firm believes the company can unlock shareholder value if Wendy’s were to shift its priorities, the analyst tells investors.