Wingstop lifted to Buy at BTIG, 'multiple levers remain'

Investing.com -- BTIG upgraded Wingstop (NASDAQ: WING) to Buy with a price target of $370 on Thursday, citing opportunities for long-term growth despite recent concerns around the company's fourth-quarter same-store sales guidance.

BTIG described the stock's post-earnings decline as a buying opportunity for investors focused on the company's longer-term outlook, explaining, "the decline below $300 represents an attractive opportunity for long-term investors willing to look past the hyper-analyzing over what guidance implies for 4Q comps."

Wingstop's brand strength and continued ability to innovate position it well for sustained growth, according to BTIG.

The firm highlighted Wingstop's potential to boost same-store sales through several initiatives, including enhanced advertising, expanding menu options such as chicken sandwiches and tenders, and introducing popular promotions like the boneless bundle.

Beyond short-term sales strategies, BTIG pointed to Wingstop's increased unit development and robust unit economics as central to its upgrade.

These factors, BTIG noted, create a solid foundation for growth that could even see the company raise its royalty rate on new units in the future, thus enhancing earnings potential.

"While the acceleration in unit development, best-in-class unit economics, and long-term potential anchor our upgrade, we do believe management could at some point increase the royalty rate on new units to capture further earnings potential," BTIG explained.

With these multiple levers in play, BTIG sees Wingstop as an attractive buy despite recent fluctuations, underscoring the firm's confidence in the company's strategies and market position as it heads into 2024.

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