Probably $6 eventually, maybe more. But hope (for buy-out, better margin, profitability) has already driven the stock to $5.50, a point of strong resistance. The PE is off the charts. From here absent real news upward movement is tougher sledding.
I think Wendy's is headed upward because of both improving financials as well as merger specultaion. There has been talk of Berkshire Hathaway blending it with their Dairy Queen business, or it might also make a good fit with YUM brands. It certainliy has seen improving prospects as it comes out with a new menu and upgrades it's image with remodels. The food and service have both improved dramatically at the Wendy's in my area.
$6 is a low expectation, WEN P/B about 1 for the longest time at $4.5/share. .... I wanted 3 years, the EPS will be growing wild. Restaurant and Hotel business are alike, the fix cost is VERY high (Hotel fix cost even higher), so when there is no traffic, we could lose a LOT of money. Then if the traffic increase only tiny 3%, it can flow into EPS so much.... I am expecting to be in the $15 range in 2014....
I can not add any more from allocation point of view, just hold and wait a few more years.