NEW YORK (AP) -- A KeyBanc Capital Markets analyst raised his rating for Wendy's on Friday, saying the restaurant operator's new products and media strategy are striking the right note.
Christopher O'Cull said in a client note that when Wendy's Co. launched the pretzel bacon cheeseburger over the summer it showed that the chain has found a way to drive sales by coming up with new products that meet consumers' expectations and using the right media approach. The analyst said that he noticed Wendy's started using more 15-second television advertisements in the third quarter, which he deemed possible because consumers are becoming more familiar with its new advertising character "Red."
O'Cull is also optimistic that new Chief Financial Officer Todd Penegor will be able to improve the way Wendy's assesses menu changes, promotions and capital investments. The analyst says that Penegor's prior experience with Kellogg will help Wendy's avoid value-oriented promotions that wind up not generating enough transactions to offer the lower margin products.
O'Cull boosted Wendy's to "Hold" from "Underweight."
Wendy's does not comment on analyst reports.
Its shares finished at $8.62 on Thursday after hitting a 52-week high of $8.71 earlier in the day.