Wendy's (WEN) PT Lowered to $11 at UBS

UBS analyst Dennis Geiger lowered the price target on Wendy's (NASDAQ: WEN) to $11.00 (from $14.00) while maintaining a Neutral rating.

The analyst commented, "For WEN's 2Q earnings (8/8), we expect traffic and sss trends remained pressured, with a focus on the trajectory into 2H and progress against key sales and development plans. Key investor expectations we've heard include 2Q US sss of down ~3-3.5% (cons. -2.8%), with expectations that aspects of FY25 guidance could be trimmed, including potentially the system sales target for -2.0% to flat. We lower our price target to $11 from $14 based on a ~12% (from 10.5%) NTM FCF yield on our estimates in 12 months to reflect current sales pressures, a still challenging macro environment that limits visibility into the '25 growth outlook, and QSR sector valuation compression, with the CEO search adding another layer of uncertainty. While valuation remains undemanding and attractive to history (~11% '26E FCF yield; ~7% 5-yr avg), we're looking for increased visibility into a sustained strengthening sales trajectory and accelerating multiyear unit expansion as drivers for upside."

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