Yahoo Finance Ahead of the Bell-Wendy's
Wendy's shares fall in premarket after Janney analyst cuts rating to "Neutral"
NEW YORK (AP) -- Shares of Wendy's were under pressure before the opening bell Monday on a downgrade from Janney Capital Markets, which cited its soaring share price and the odds that comparable store sales will be in line or below most estimates in the fourth quarter.
Analyst Mark Kalinowski notes that the restaurant's shares have jumped 40 percent since late May. The chain has revamped stores and juiced up its menu as it fights for market share from both fast food chains and upstarts like Chipotle.
Kalinowski believes the ongoing efforts to refranchise restaurants and improve its asset base will be offset, at least in the near term, by sluggish sales in the sector, as well as tough competition.
"Every major sector of the domestic chain restaurant industry appears to have suffered through a weak December in terms of same-store sales, although certainly at least part of this reflects adverse weather (especially in the first half of the month)," Kalinowski wrote.
Janney stripped its 'buy' rating from the company, lowering it to 'neutral,' and Kalinowski cut his fair value estimate for the stock by $1, to $9.
Wendy's will release preliminary fourth-quarter results on January 13.
Shares of The Wendy's Co. fell 28 cents, or 3 percent, to $8.40 in premarket trading.
