Guggenheim Downgrades Wendy's (WEN) to Neutral; 'Breakfast Creates Uncertainty'

Guggenheim analyst Matthew DiFrisco downgraded Wendy's (NASDAQ: WEN) from Buy to Neutral.

• Steps aside citing NT uncertainty related to Breakfast coupled with "curbed" guidance.

"Our investment outlook is reduced as we see the announcement to enter breakfast as adding risk to shares and diluting the NT free cash flow generation," the analyst commented. "Management reduced 2019's outlook to account for a $20mm upfront investment relating to launching breakfast across the U.S. system in 2020. While it could lead to longer term system sales, we view the day-part expansion as a sign of slowing NT momentum in the core lunch and dinner business. WEN shares reached our $22 price target based on our prior higher earnings estimates, as such we are removing our target."

For an analyst ratings summary and ratings history on Wendy's click here. For more ratings news on Wendy's click here.

Shares of Wendy's closed at $21.95 yesterday.

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