The better-than-expected 2Q17 earnings and initiatives taken by Wendy’s (WEN) management to improve the quality of its menu items and enhance the customer experience could have compelled analysts to raise their target price. As of August 3, 2017, analysts are expecting Wendy’s stock price to reach $16.52, which represents an increase of 7.7% from $15.34.
After the announcement of 2Q17 earnings, many analysts have raised their price target. On May 31, Citi Group had increased its 12-month target price for Wendy’s from $16 to $19. On May 30, 2017, Barclays raised its target price from $17 to $18.
The target price and return potential of Wendy’s peers are as follows:
Of the 21 analysts that follow Wendy’s, 42.9% are recommending a “buy,” 52.4% are recommending a “hold,” and 4.8% are recommending a “sell” option. Wendy’s target price is greater than its current stock price. However, this does not mean an automatic “buy.” Investors should carefully analyze various analysts’ estimates discussed in our earlier articles before making any investment decisions.