|Bid||16.44 x 800|
|Ask||16.45 x 1400|
|Day's Range||16.26 - 16.52|
|52 Week Range||13.57 - 17.75|
|PE Ratio (TTM)||21.60|
|Forward Dividend & Yield||0.34 (2.04%)|
|1y Target Est||N/A|
McDonald's is the latest franchise to get a taste of Coca-Cola's push to build exclusive drink menu items.
Tyson Foods (TSN) announced its fiscal second-quarter results on May 7 before the market opened. Its revenue increased 7.6% to $9.7 billion, but it missed the consensus estimate by 1.2%. It reported an increase in earnings to $1.27 per share compared to EPS of $1.01 in its fiscal second quarter of 2017. Its EPS missed the consensus estimate of $1.30.
On the same day, analysts were expecting the company’s stock price to reach $18.90 in the next 12 months, which represents a return potential of 13.1%. The measures undertaken by the company’s management, such as reimaging restaurants, expanding delivery services, and innovating menus, could have prompted analysts to maintain their target price. Of the 23 analysts who follow Wendy’s, 65.2% are favoring a “buy” and 34.8% are favoring a “hold.” None of the analysts are favoring a “sell” option.
Valuation multiples help investors compare companies with similar business models. We’ve opted for the forward PE (price-to-earnings) multiple due to the high visibility in Wendy’s (WEN) future earnings. Forward PE multiples are calculated by dividing a company’s stock price from analysts’ earnings estimates for the next four quarters.
Wendy’s (WEN) posted EPS (earnings per share) of $0.08 in 1Q18. However, removing special items, the adjusted EPS stood at $0.11, versus analysts’ expectation of $0.10. Compared to 1Q17, the company’s EPS increased 22.2%.
Wendy’s (WEN) posted EBITDA (earnings before interest, tax, depreciation, and amortization) of $90.8 million in 1Q18, which represents an EBITDA margin of 23.9%, compared to 31.4% in 1Q17. However, removing advertising funds revenue, we find that the company’s adjusted EBITDA margin stood at 30.1%.
For the next four quarters, analysts expect Wendy’s (WEN) to post revenue of $1.61 billion, which represents growth of 22.2% from $1.32 billion in the corresponding four quarters of the previous year. The revenue growth is expected to be largely driven by a new accounting standard, which mandates the inclusion of fees collected from franchisees for marketing in revenue. Also, the company’s revenue is expected to be driven by positive SSSG (same-store sales growth), and the addition of new restaurants.
Wendy’s (WEN) posted SSSG (same-store sales growth) of 1.8%, with company-owned restaurants posting SSSG of 0.8% and franchised restaurants posting 1.8%.
Wendy’s (WEN) posted revenue of $380.6 million in 1Q18, which represents a rise of 33.1% from $285.2 million in 1Q17. The company’s 1Q18 revenue outperformed analysts’ revenue estimate of $379.5 million.
Wendy's (WEN) initiatives like menu innovation, technological upgrades, international expansion and re-imaging of units are likely to drive the top line, while franchising will aid earnings of the company.
As of May 4, Shake Shack (SHAK) was trading at $55.95. Analysts were expecting the company’s stock price to reach $48.90 in the next 12 months, which represents a fall of 12.6% from its current stock price.
Although Wendy’s outperformed analysts’ revenue and EPS expectations, its stock price fell ~3.5% in the after-market hours due to weak SSSG (same-store sales growth). The company posted SSSG of 1.6% in North America against analysts’ expectation of 1.8%. Wendy’s management blamed the adverse weather for lower-than-expected SSSG.
While the positive effect of lower tax rate related to share-based payments favors Wendy's (WEN) first-quarter earnings, lower company-operated restaurant margins are concerns.
As Shake Shack (SHAK) is still in the growth phase of its business cycle, its operating expenses should be high, and earnings per share can’t be considered for its valuation. The strong 1Q18 earnings and raising of 2018 sales guidance by Shake Shack’s management appear to have increased investors’ confidence, leading to a rise in the company’s stock price and its valuation multiple. As of May 4, Shake Shack was trading at a forward EV-to-sales multiple of 4.1x, compared to 3.5x before the announcement of 1Q18 earnings.
Wendy's reported earnings that beat analyst expectations on Monday. Shares of Wendy's WEN slipped Tuesday after the company said inclement winter weather hampered sales in the first quarter. Wendy's said that same-store sales grew 1.6 percent during the quarter, just shy of analysts estimates of 1.8 percent, according to StreetAccount.
Shares of Wendy's Co. fell more than 4% late Tuesday after the fast-food chain reported first-quarter per-share profit slightly below expectations. Wendy's said it earned $20.2 million, or 8 cents a share, in the quarter, compared with $22.3 million, or 9 cents a share, in the year-ago period. Analysts polled by FactSet had expected Wendy's to report GAAP and adjusted earnings of 10 cents a share on sales of $374 million.
On a per-share basis, the Dublin, Ohio-based company said it had net income of 8 cents. Earnings, adjusted for non-recurring costs, came to 11 cents per share. The results topped Wall Street expectations. ...
Wendy's Co reported lower-than-expected first-quarter sales at its established outlets in North America as the burger chain struggled to attract enough diners in a fiercely competitive restaurant industry. ...
Shake Shack (SHAK) posted EPS (earnings per share) of $0.13 in 1Q18. However, removing special and one-time items, the company’s adjusted EPS stood at $0.15, which represents growth of 50% from $0.10 in 1Q18. The company also outperformed analysts’ earnings expectations of $0.08 in 1Q18.
Shake Shack (SHAK) posted EBIT (earnings before interest and tax) of $7.75 million in 1Q18, which represents an EBIT margin of 7.8%. The company’s EBIT margin was at 7.5% in 1Q17. The expansion was driven by lower food and paper costs, occupancy and related expenses, and pre-opening costs.
On May 7, JPMorgan Chase downgraded Shake Shack (SHAK) from “neutral” to “underweight.” However, it raised its 12-month target price from $40 to $49. The new target price represents a fall of 12.8% from its current stock price. JPMorgan Chase managing director John Ivankoe has stated that the recent rise in Shake Shack’s stock price and valuation has been overstretched.