Please ensure Javascript is enabled for purposes of website accessibility

Analyst Says Wendy's Comparable Sales Have Turned Positive

By Rich Duprey – Updated Jun 5, 2020 at 8:58AM

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

The burger shop may be getting a lift from its new breakfast business.

The turnaround at Wendy's (WEN 0.36%) may be happening faster than at other fast food chains. An analyst says comparable store sales at the burger shop turned positive over the last four weeks.

Longbow analyst Alton Stump said his checks with Wendy's franchisees indicate comps are now positive, compared to a 15% decline in April. That could get the fast food chain's stock cooking again.

Wendy's restaurant

Image source: Wendy's.

Breakfast bounding higher

Wendy's first-quarter earnings report last month hinted at the momentum that was building behind its efforts to reinvigorate growth at the restaurant, such as introducing breakfast to the chain. The daypart's sales now account for 8% of Wendy's total revenue.

Stump told clients in a note he is increasingly confident the restaurateur will outperform many of its peers in the post-pandemic world, and he nudged his price target on the stock up slightly, moving it to $25 per share from $24 per share. Wendy's currently trades just under $22 a stub.

It bodes well for the chain as businesses begin opening again and consumers' morning routines normalize. That Wendy's breakfast business was able to perform so well despite the turmoil suggests it could take off when people get moving in the morning again.

CEO Todd Penegor told analysts on Wendy's earnings conference call: "With mobility down so much and people not having a morning routine, the breakfast daypart across the industry has been hit very hard. Even with that headwind, we've been able to get folks to come out and try our great breakfast offerings."

The burger joint noted digital sales more than doubled in the first quarter, and mobile app downloads and users increased 25% during the pandemic.

Rich Duprey 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
$22.25 (0.36%) $0.08

*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 11/30/2022.

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.