Wendy's owns and franchises hamburger-focused Wendys restaurants. The company was founded in 1969 and is based in Dublin, Ohio.
WEN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Wendy's Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Wendy's Co ranked in the 64th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 123.33%. In terms of the factors that were most noteworthy in this DCF analysis for WEN, they are:
Its compound free cash flow growth rate, as measured over the past 4.24 years, is 0.72% -- higher than 86.98% of stocks in our DCF forecasting set.
Wendy's Co's weighted average cost of capital (WACC) is 8%; for context, that number is higher than only 12.91% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Wendy's Co has a reliance on debt greater than 54.38% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
NVR, WWE, FBHS, HIBB, and RSTRF can be thought of as valuation peers to WEN, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Cowen is out with a very positive read on Wendy's ([[WEN]] +0.2%) after meeting with management.Analyst Andrew Charles: "Looking ahead, the company believes there is the opportunity to grow awareness of breakfast as the offering only has 50% broad awareness as well as a large, but unquantified, group of existing customers...
Investment Conclusion. There were a lot of positives in The Wendy’s Company’s (WEN) F2Q2020 results. Fueled by drive-through transactions, domestic same-stores sales turned positive in June and July and grew sequentially from June to July. In addition, the breakfast segment continued to deliver strong retail sales growth despite the impact...
Poonam A. Arora on Seeking Alpha | August 10, 2020