|Bid||17.58 x 800|
|Ask||18.75 x 1000|
|Day's Range||18.29 - 18.62|
|52 Week Range||13.57 - 18.62|
|PE Ratio (TTM)||20.54|
|Earnings Date||Nov 7, 2018|
|Forward Dividend & Yield||0.34 (1.85%)|
|1y Target Est||19.81|
I am writing today to help inform people who are new to the stock market and want to learn about Return on Equity using a real-life example. With an ROERead More...
Wendy’s Co. said Thursday it sold its remaining stake in Inspire Brands, the owner of Arby’s and Buffalo Wild Wings, back to the company for $450 million. Dublin, Ohio-based Wendy’s held a 12.3% stake in Inspire Brands, whose restaurant portfolio also includes fast-casual chain R Taco. Atlanta private-equity firm Roark Capital Group is majority owner of Inspire Brands.
Wendy's Co. (wen) shares rose 3.1% in Thursday trading after it announced the sale of its 12.3% ownership interest in Inspire Brands, owners of Arby's and Buffalo Wild Wings, for $450 million. Wendy's said the sale will give it the flexibility to invest in its brand.
Wendy’s Co. more than doubled its return on the Arby’s business. The Dublin-based restaurant company Thursday said it sold its 12.3 percent stake in Arby's-owner Inspire Brands back to that Atlanta-based company for $450 million. It’s a 1,400 percent increase on what that stake was valued at in 2011.
Wendy’s Co. has agreed to sell its stake in Arby’s backer Inspire Brands Inc., marking the latest ownership change in a rapidly shifting restaurant industry. The sale price represents a 38 percent premium on Wendy’s previous valuation of the investment, it said. “The opportunity to monetize our investment in Inspire Brands will allow us to invest in future growth for the Wendy’s brand and company, which is our top priority,” said Todd Penegor, Wendy’s chief executive officer.
DUBLIN, Ohio, Aug. 16, 2018 /PRNewswire/ -- The Wendy's Company (WEN) announced today that it has accepted an offer from Inspire Brands (Owner of Arby's®, Buffalo Wild Wings®, and R Taco®) to sell its 12.3% ownership interest in the company back to Inspire Brands for $450 million. The agreement was approved by The Wendy's Company Board of Directors and represents a 38% premium on the Wendy's Company's previous valuation of the investment.
, the fast-food chain whose board of directors is chaired by veteran activist investor Nelson Peltz, saw its shares rise to their highest in more than a decade on Thursday after it sold its stake in Inspire Brands, whose brands include Arby’s and Buffalo Wild Wings. Wendy’s shares rose as high as $18.59 after the announcement, their highest since April 2007, according to Thomson Reuters. The move comes after Wendy’s said it was selling back its 12.3 per cent ownership interest to Inspire Brands for $450m.
Of the 17 analysts that follow Jack in the Box (JACK), 47.1% favored a “buy,” while 52.9% favored a “hold” recommendation on August 9. None of the analysts favored a “sell” recommendation. On the same day, analysts forecast an average target price of $99.0, which represents a return potential of 6.7% from its current stock price of $92.76.
Of all the valuation multiples available, we have opted for the forward PE multiple due to high visibility in Jack in the Box’s (JACK) future earnings. The forward PE multiple is calculated by dividing the company’s stock price by analysts’ EPS estimates for the next four quarters. Management’s strong third fiscal quarter earnings and initiatives to drive the company’s sales appear to have increased investors’ confidence, which led to a rise in its stock price and valuation multiple.
Jack in the Box (JACK) posted an EPS of $1.70. Jack in the Box’s EPS growth was driven by the expanded EBIT margin, the lower effective tax rate, and share repurchases. Jack in the Box’s EBIT margin has improved from 15.5% to 26.4% due to refranchising company-owned restaurants, sales leverage from positive SSSG (same-store sales growth), and lower G&A (general and administrative) costs. The improvement was partially offset by increased labor expenses and higher repair and maintenance costs.
After posting systemwide negative SSSG (same-store sales growth) for the last five quarters, Jack in the Box (JACK) returned to the positive territory with an SSSG of 0.5%. During the quarter, the company posted an SSSG of 0.6% in company-owned restaurants. In franchised restaurants, the SSSG was at 0.5%. In company-owned restaurants, the SSSG was driven by 2.6% growth in the average check size due to more menu items and a favorable product mix. However, the transaction declined 2.0%, which partially offset some of the increase in the SSSG.
Jack in the Box (JACK) posted revenues of $188 million and outperformed analysts’ expectation of $184 million. The company’s revenues declined 23.6% year-over-year due to refranchising company-owned restaurants.
Jack in the Box (JACK) posted its third fiscal quarter earnings after the market closed on August 8. The company posted an adjusted EPS of $1.0 on revenues of $188.0 million. The company’s EPS rose 1.0% year-over-year, while its revenues declined 23.6%.
Of all the available valuation multiples, we have opted for the forward PE (price-to-earnings) multiple due to high visibility in Wendy’s (WEN) future earnings. The forward PE multiple is computed by dividing the company’s stock price from analysts’ EPS estimates for the next four quarters. The better-than-expected second-quarter sales and aggressive expansion of delivery service by Wendy’s management appears to have increased investors’ confidence, leading to a rise in the company’s stock price and its valuation multiple.
In the second quarter, Wendy’s (WEN) posted EPS of $0.12. Wendy’s EPS growth was driven by higher adjusted revenue, a lower effective tax rate, and share repurchases in the last four quarters, partially offset by a fall in the adjusted EBITDA (earnings before, interest, tax, depreciation, and amortization) margin. Due to the enactment of tax reforms, Wendy’s effective tax rate fell to 25.5% for the quarter compared to 38.9% in the corresponding quarter of the previous year.
Wendy’s (WEN) posted SSSG (same-store sales growth) of 1.9% in North America, outperforming analysts’ expectation of 1.3%. However, the company’s overall SSSG stood at 2.1% with SSSG of 2.0% at company-operated restaurants and 2.1% at franchised restaurants. The SSSG at company-owned restaurants was driven by an increase in average check size partially offset by a lower customer count.
Due to a new accounting standard, the company included $84.6 million collected from franchisees for marketing in its second-quarter revenue. The revenue growth was driven by the net addition of 92 restaurants in the last four quarters and positive SSSG (same-store sales growth). The revenue growth was driven by the net addition of one company-owned restaurant and positive SSSG of 2.0%.
Wendy’s (WEN) posted its second-quarter earnings after the market closed on August 7. The company posted adjusted EPS (earnings per share) of $0.14 on revenues of $411 million. Year-over-year, the company’s EPS increased by 7.7%, while its revenue increased by 28.3%.
Customers like having Wendy’s delivered to their doorstep. The Dublin-based restaurant chain Wednesday said delivery – through DoorDash in the U.S. and Skip the Dishes in Canada – is expanding faster than expected and now is offered in 40 percent of its North American units. On a Wednesday morning conference call with stock analysts, CEO Todd Penegor said customer acceptance is good and that average checks are as much as double the typical Wendy’s receipt while customer satisfaction scores remain high, too.
On August 3, Shake Shack (SHAK) was trading at $56.34. On the same day, analysts expected the company’s stock price to reach $54.00, which represents a fall of 4.2% from its current stock price.
Of the available valuation multiples, we have opted to use the forward EV-to-sales ratio, as Shake Shack (SHAK) is still in the growth phase of its business life cycle. Despite posting strong second-quarter earnings, Shake Shack didn’t raise its 2018 revenue guidance due to the delays in opening new restaurants. Analysts and investors appear to have been disappointed, as they expected the company’s management to raise its revenue guidance.
While the positive effect of lower tax rate related to share-based payments favors Wendy's (WEN) second-quarter earnings, lower company-operated restaurant margins are concerns.