Please ensure Javascript is enabled for purposes of website accessibility

Why Wendy's Stock Was Gaining Today

By Jeremy Bowman - Mar 30, 2020 at 6:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the fast-food chain got a boost from the broader market.

What happened

Shares of Wendy's (WEN -1.75%) were gaining today as the fast-food chain seemed to benefit from an analyst note and rose along with the broader market.

The stock finished up 6.4% as a number of restaurant stocks moved higher, and the S&P 500 rose 3.4% as well.

The exterior of a Wendy's restaurant

Image source: Wendy's.

So what

Hope that the U.S. is making progress toward controlling the COVID-19 pandemic and signs that the spread is slowing in Europe seemed to lift markets today. A foreseeable end to the pandemic would be a great sign for restaurant stocks. The industry has been hit hard by the virus, which has forced restaurants in a number of states to limit themselves to just takeout and delivery.

Last Thursday, Wendy's said it would close its restaurant dining rooms, and it withdrew its full-year guidance because of the coronavirus. This morning, Piper Sandler analyst Nicole Miller Regan lowered her price target on the stock from $24 to $15, but kept her overweight rating. That follows a similar move last Friday from Longbow Research analyst Alton Stump, who noted that Wendy's could pick up market share since the outbreak could force smaller, independent operators to close. 

Now what 

Wendy's stock had fallen nearly 70% at one point during the coronavirus sell-off, but the stock has bounced back over the last couple of weeks as investors seemed to believe it was oversold. Last week's $2 trillion rescue package from the federal government also seems to have boosted confidence that chains like Wendy's won't experience major long-term losses.

Still, there's no question that the weeks ahead will be tough for the fast-food chain. It has already allowed franchisees to defer payments on rent and royalties, and it will likely have to keep such policies in place for as long as restaurants are closed. While that will put a big dent in its bottom line, over the long term the company should be able to recover.  


Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Wendy's Company Stock Quote
The Wendy's Company
$20.74 (-1.75%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.