A wave of analyst price target cuts made Wendy's (WEN +1.49%) stock a very unappealing investment on Tuesday. Those moves closely followed the fast food company's latest set of quarterly earnings, which fell notably short of top-line guidance for this year. The company's stock lost more than 6% of its value that trading session.
Unwanted cuts
By my count, no less than ten analysts tracking Wendy's made such adjustments that day, following the company's fourth-quarter and full-year 2025 earnings release last Friday.
Image source: Getty Images.
Among the numerous researchers doing so were those at investment banking heavyweights Goldman Sachs and Morgan Stanley. The former's Christine Cho trimmed her price target to $7 per share from $8, while maintaining her sell recommendation. Her peer Brian Harbour at Morgan Stanley reduced his to $8 per share from $9, also keeping his equivalent of a sell designation intact.
Although Wendy's beat on both the top and bottom lines for the quarter, it posted notable declines in major fundamentals. Total sales fell by 8% year over year to $3.4 billion, while per-share net income not in accordance with generally accepted accounting principles (GAAP) plummeted by 36% to $0.16 per share.
Worse, its guidance for full-year 2026 non-GAAP (adjusted) net income -- $0.56 to $0.60 per share -- was well short of the consensus analyst projection of $0.85.
NASDAQ: WEN
Key Data Points
Not a tasty meal just now
In an environment where once-beloved food and beverage stocks have fallen from favor -- I'm looking at you, Chipotle Mexican Grill and Starbucks -- a rather traditional fast food purveyor like Wendy's has to excel to earn investor favor. With those recent declines in key fundamentals, it's not getting the job done, and I can't imagine a scenario where the company suddenly turns this around. I'd avoid Wendy's stock these days.
