NEW YORK (AP) -- A Janney Capital analyst anticipates that Wendy's upcoming national launch of its pretzel bacon cheeseburger will help give a boost to a key revenue metric, and raised the chain's rating and price target.
The company's stock added 20 cents, or 3.3 percent, to $6.20 in premarket trading Friday.
Mark Kalinowski of Janney Capital Markets said in a client note that he's heard from industry sources that the pretzel bacon cheeseburger was one of Wendy's most successful test products in the past 20 years.
While Wendy's has said that the burger will be available this year, it has not given an exact launch date. Kalinowski believes that it may debut in the third quarter, so he's increasing his estimates for revenue at North American company-owned and franchised stores open at least a year to 5 percent from 2 percent.
This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Kalinowski anticipates that the new burger "will likely be a success to some meaningful degree," so shares of Wendy's Co. should either be on par with those of other similar restaurant operators or top its peers over the next three to six months.
"It appears the medium-term potential rewards outweigh the risks," the analyst said.
Kalinowski upgraded Wendy's to "Buy" from "Neutral" and increased its price target to $7 from $6.
Wendy's does not comment on analyst reports.
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