Wendy's/Arby's (WEN) Sees Upside On a Couple Bullish Items

Beaten-down fast food chain Wendy's/Arby's Group, Inc. (NYSE: WEN) has a couple positive things going for it this morning that has the stock moving up about 6% higher in pre-open trading.

First, Barron's had a mostly bullish article on the company saying its prospects look "appetizing." Activist investor Nelson Peltz, its largest shareholder, said the stock is significantly undervalued. Using a multiple of nine on 2011 EBITDA, the chain would be valued at $5 billion.

In addition, Goldman Sachs reiterated its bullish stance on the company and updated estimates to reflect the closing of the company's $565M senior notes offering. The firm said the shares trade more on EBITDA at this point than EPS and continues to see EBITDA above $400M for FY09. The firm also said the company is harvesting cost saves quicker than planned. The firm has a $6 12-month price target on WEN, based on 8.5X 2010 their 2010 EBITDA estimates, which suggests 62% upside to Friday's close.

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