Deutsche Bank (DB) maintained its "Hold" rating on Wendy's Co.
(NYSE:WEN), saying its sales checks for the months of November and
December suggest slowing trend.
"Our checks suggest SSS have slowed since the national advertising
ended on the new burgers and as the stores begin to lap the rollout of
the new fries last Dec. We have also heard mixed reviews on the new
mid-tier "W" burger (launched in mid-Nov) with some franchisees noting
that acceptance has been good so far, while one indicated that consumers
are trading down from higher ticket items," DB analyst Jason West said
in a note.
"Overall, we believe SSS have likely decelerated into the low single
digit range in Nov/Dec vs. an estimated +6% in Oct," West added. "We
believe Dec is a bit softer than Nov."
While slower sales following the new burger launch are not a huge
surprise, West said the market may be disappointed if the company is
unable to sustain decent sales momentum behind this major new product
launch.
West has a price target of $5.75 on the stock.
On Thursday, WEN is trading 3.6 percent higher at $5.18. The stock
has been trading in the 52-week range between $4.29 and $5.62.
