Barclays Maintains an 'Overweight' on Wendys-Arbys Group (WEN); 2011 Reduction No Surprise; Turn Intact
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Price: $9.01 +2.27%
Rating Summary:
13 Buy, 25 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 25 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Overweight' on Wendys-Arbys Group (NYSE: WEN), PT $6.
Barclays analyst says, "2011 EBITDA guidance (pro forma ex Arby's) was reduced, though not surprising with our estimate already below the prior range, and with 2011 still termed "transition year". Similar to the 1Q11 industry theme, a sales shortfall is not the driver of the reduction, but rather elevated commodity costs. Specific to 1Q11, pro forma EBITDA was in-line with internal expectations and our view. Separately, in terms of the desired Arby's sale, talks are progressing among "several quality bidders". Such will allow for greater focus and re-investment in Wendy's, while further deleveraging the balance sheet and returning capital to shareholders. While we expect Flat EBITDA in 2011, the building blocks are in place for strong acceleration beginning in 2012, with 10-15% long-term growth guidance intact. With growth potential above QSR peers and yet still trading at a significant discount to such peers, we remain bullish on the turnaround."
For more ratings news on Wendys-Arbys Group click here and for the rating history of Wendys-Arbys Group click here.
Shares of Wendys-Arbys Group closed at $5.02 yesterday.
Barclays analyst says, "2011 EBITDA guidance (pro forma ex Arby's) was reduced, though not surprising with our estimate already below the prior range, and with 2011 still termed "transition year". Similar to the 1Q11 industry theme, a sales shortfall is not the driver of the reduction, but rather elevated commodity costs. Specific to 1Q11, pro forma EBITDA was in-line with internal expectations and our view. Separately, in terms of the desired Arby's sale, talks are progressing among "several quality bidders". Such will allow for greater focus and re-investment in Wendy's, while further deleveraging the balance sheet and returning capital to shareholders. While we expect Flat EBITDA in 2011, the building blocks are in place for strong acceleration beginning in 2012, with 10-15% long-term growth guidance intact. With growth potential above QSR peers and yet still trading at a significant discount to such peers, we remain bullish on the turnaround."
For more ratings news on Wendys-Arbys Group click here and for the rating history of Wendys-Arbys Group click here.
Shares of Wendys-Arbys Group closed at $5.02 yesterday.
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