20.75 -0.03 (-0.14%)
Pre-Market: 8:15AM EDT
|Bid||20.57 x 800|
|Ask||21.30 x 800|
|Day's Range||20.12 - 21.44|
|52 Week Range||14.96 - 22.84|
|Beta (3Y Monthly)||0.53|
|PE Ratio (TTM)||10.47|
|Forward Dividend & Yield||0.40 (2.00%)|
|1y Target Est||N/A|
Wendy's Co. shares rose 3.4% in Friday trading after the chicken-sandwich-and-burger chain raised its dividend and announced third-quarter same-restaurant sales that beat expectations. Wendy's hosted its investor day on Friday. Wendy's 20% dividend increase goes into effect with the next quarterly payment, which is payable on December 16, 2019 to shareholders of record as of December 2, 2019. The dividend hike brings the payout to 12 cents per share from 10 cents per share. For the third quarter, Wendy's says global systemwide sales rose 5.7%. North America same-store sales were up 4.4%, ahead of the 2.4% growth FactSet guidance. For fiscal 2020, Wendy's expects global systemwide sales of about $12.0 billion to $12.5 billion. Wendy's stock has gained 32.5% for the year to date while the S&P 500 index is up 18.8% for the period.
Cowen restaurant analyst Andrew Charles said it may cost Wendy’s $250 million total in 2020 and 2021 to launch its national breakfast program.
Cowen analyst Andrew Charles downgraded the restaurant chain to Market Perform from Outperform, and lowered his price target by $2, to $20. “Breakfast does not provide Wendy's a competitive advantage,” he wrote.
Wendy's Co. will have to generate $1 billion in sales of its new breakfast menu to "at least" break even, according to BTIG analysts, and a good portion of that sales share will come from quick-service competitors who will fight back with discounts, marketing and innovation. Analysts think McDonald's Corp. in particular, which has the largest breakfast share, though it "has struggled in recent years to stabilize transactions in its morning daypart." Wendy's is investing $20 million in this latest effort to build the breakfast business, and the topic is expected to be key to the company's investor event, scheduled for October 11. "We remain neutral given uncertainty about the breakfast expansion and current heightened valuation," analysts said. Wendy's stock closed Wednesday at $19.92, and has rallied 28.3% for 2019 so far. The S&P 500 index has gained 14.7% for the year to date.
Chipotle Mexican Grill will start serving carne asada nationwide, a rare new edition to its menu. Shares rose in morning trade.
Wendy’s announced that it would introduce breakfast nationwide in 2020 and analysts are cautious after a number of previous failed attempts to do so.
Spicy chicken nuggets are performing well after launching on Aug. 12 and could have contributed a 100 to 150 basis point lift in comps along with higher traffic and better average ticket size. Franchisees expressed an "admittedly surprisingly positive view" of breakfast. A multi-daypart advertising campaign will help mitigate incremental dollars spent by either corporate or franchisees next year.
Analyst reaction to Wendy’s fourth attempt at breakfast has been mixed, though mostly cautious. Although there is opportunity for profit, some analysts are unsure the chain’s hefty investment will pay off.
Cracks were found in a structural part on 38 Boeing jets. Wendy's is expanding into Europe while Dyson abandons its electric car project. Yahoo Finance's Adam Shapiro, Brian Cheung and Pras Subramanian discuss on On the Move.