If investing in fast-food does not sound like a great plan these days, then you may be missing out, says JPMorgan, a recent CNBC report noted. That is the case for fast-food chain stock Wendy’s (WEN), which may be in line for a significant win as JPMorgan analysts look for it to potentially make some big moves ahead. Investors took the notion seriously, and sent shares up over 1.5% in Monday afternoon’s trading.
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JPMorgan, via analyst Rahul Krotthapalli, pointed out that Wendy’s current share price is actually looking attractive. Sufficiently so, in fact, to call it a “…value-oriented opportunity.” Krotthapalli pointed out that Wendy’s is offering 6-7% free cash flow yield, as well as as the possibility to push that up to 8.5% or more with “…ex-funded franchise development.”
And, with international markets still sitting “underpenetrated,” that potentially opens up some new frontiers for Wendy’s to push into and make some money selling burgers, chicken, and Frosty treats to the locals. In fact, Krotthapalli notes, Wendy’s is on track to open 700 stores this year, and only 200 of them will be in the United States, representing a major international expansion.
“Insanely Good” At-Home Option
Meanwhile, for those households more focused on their grocery bills than a dinner out, a new report suggests the best of both worlds may be in hand. Reports note that Wendy’s particular breed of “fresh, never frozen” beef patties is making their way to grocery stores. The exact circumstances are unclear, but so far, the patties have been spotted in Columbus, Ohio and Denver, Colorado grocery chains.
When coupled with the recent release of Wendy’s chili in cans, it is now within our reach to eat Wendy’s without ever leaving the house, the kind of development that used to be a headliner at world’s fairs. But with customers cutting out fast food to save money, this might be exactly what Wendy’s needed to make up some losses.
Is Wendy’s Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on WEN stock based on four Buys, 15 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 26.99% loss in its share price over the past year, the average WEN price target of $16.08 per share implies 26.51% upside potential.
