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A Few Key Takeaways From KeyBanc's Visit To Wendy's HQ

Jayson Derrick

KeyBanc Capital Markets analysts visited Wendys co (NASDAQ: WEN) head office in Ohio and left with eight key takeaways.

The Analyst

KeyBanc's Eric Gonzalez maintains a Sector Weight rating on Wendys.

The Thesis

KeyBanc met with a handful of Wendys' senior executives, including CEO Todd Penegor, CFO Gunther Plosch and Chief Commercial Officer Kurt Kane. Some of the more notable takeaways from the tour and chat include:

  • Franchisee profitability likely fell in 2018 (final numbers not yet available) after rising from 2015 to 2017, but restaurant margins improved in the first quarter.
  • Wendys wants to be a global restaurant company but management does "not see itself that way in its current form."
  • Wendys is seeing early signs of benefits of scale, which will only "get larger" moving forward from better understanding consumer data.
  • Traffic trends are likely to remain flat to slightly negative in the near term, but progress was made during the first quarter.
  • Management's exclusive delivery partnership with DoorDash is a strategic initiative meant to drive incremental traffic at off-peak hours.
  • The company "expressed interest" in serving plant-based meat alternative products and continues to conduct R&D to "determine the sustainability of the trend."
  • Management has long-term contracts in place to hedge chicken and potato costs, but it can only lock in beef prices three months in advance.

Price Action

Shares of Wendys traded around $19.32 at time of publication Monday.

Related Links:

Where's The Beef? Street Weighs In On Wendy's Stock

There's A Beyond Meat Shortage At Freebirds Restaurants

Latest Ratings for WEN

Date Firm Action From To
Jun 2019 Initiates Coverage On In-Line
May 2019 Initiates Coverage On Overweight
May 2019 Maintains Outperform

View More Analyst Ratings for WEN
View the Latest Analyst Ratings

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