Wendy's Nationwide Breakfast Launch Is Coming Soon
Fast-food chain Wendy's Co (NASDAQ: WEN) will launch its breakfast offering on March 2, but the math behind Wendys' goals implies a "limited impact" to rivals.
What Happened
Wendy's breakfast menu will offer consumers a "fresh twist to familiar flavors" with new items that are built on fan favorites, the company said. Consumers will soon be able to enjoy items like a Breakfast Baconator, Honey Butter Chicken Biscuit, and a Frosty-ccino.
Wendys' breakfast launch marks its fourth attempt in doing so although management has shown a dedication towards a more meaningful approach, Credit Suisse analyst Lauren Silberman wrote in a note. The breakfast launch is expected to be immediately profitable for Wendy's' franchisees and for the company next year.
Why It's Important For Wendy's
Wendy's' already set a goal of generating $600-$800 million in new revenue from breakfast, which implies 2.0 to 2.5% of total quick-service restaurant breakfast sales. This implies minimal disruption to any one rival. The financial impact to Dunkin Brands Group Inc (NASDAQ: DNKN) could be the most profound and pressure same-stores sales by 1% to 1.5%, followed by starbucks Corporation (NASDAQ: SBUX) at around 1% and McDonald's Corp (NYSE: MCD) at around 0.5%.
However, Silberman said these figures are "potentially aggressive" as it doesn't factor in industry breakfast traffic growth and assume Wendy's proportionately takes share from the largest competitors. Also, the early estimates can't predict how rivals can react and changes in consumer behaviors, among other variables and unknowns.
Silberman maintains a Neutral rating on Wendy's with a $22 price target.
Related Links:
The Latest Food Companies To Announce Ambitious Green Goals
Restaurant Business Dishes Out What To Look Out For In 2020
Latest Ratings for WEN
Jan 2020 | Maintains | Equal-Weight | ||
Dec 2019 | Maintains | Equal-Weight | ||
Dec 2019 | Initiates Coverage On | Sector Perform |
View More Analyst Ratings for WEN
View the Latest Analyst Ratings
0
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
