A day after Wendy’s Co (NASDAQ: WEN) reported market-beating results for its fiscal second quarter, Evercore ISI said the stock could rise up to 18% in the future. Including the price action this morning, shares of the company are now up about 8% from Tuesday’s close.
David Palmer upgraded Wendy’s to “outperform”
In a note to clients, Evercore ISI’s David Palmer expressed confidence in Wendy’s system-wide sales growth as the analyst upgraded the stock from ‘market perform’ to ‘outperform’ on Thursday, with a price target of $27 a share. Palmer previously had a price target of $24 on Wendy’s.
“Near-term estimates have been raised on higher SSS, and better company operated margins and medium-term estimates on higher unit growth and royalty contributions from REEF,” Palmer added.
The U.S. fast-food restaurant company partnered with Reef Kitchens in 2020. The collaboration, it said in its earnings report yesterday, aims at opening and operating 700 delivery kitchens in the U.K, the U.S. and Canada by 2025.
Deutsche Bank also raised its price target on Wendy’s
Wendy’s results and ambitions weren’t only promising for Evercore ISI but for other research firms as well, including Deutsche Bank that reiterated its buy rating on the stock this morning and raised its price target from $25 to $26 a share, representing a potential upside of about 10%.
Wendy’s also raised its guidance for the full financial year on Wednesday. It now expects to perform better than the FactSet consensus in fiscal 2021. On the back of hawkish quarterly performance, the board of directors authorised another $70 million of share repurchase and a 20% increase in the quarterly dividend.
The upgrades on Wendy’s are in contrast with Cramer, who said in early June that the stock was expensive after it rallied 25% on Reddit popularity.
The post Evercore ISI sees an 18% upside in Wendy’s stock appeared first on Invezz.
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Wajeeh Khan
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