Wendy's Co

The largest shareholder of Wendy's fast food chain is exploring a potential merger or acquisition. Will WEN stock go private as a result?

Who supplies Wendy’s fries? Learn more about the fast-food chain’s fries—and the new french fry recipe the company is rolling out in September.

Investors want to know if Reddit’s WallStreetBets community will target Wendy's (WEN) stock next. Is WEN stock a good buy now?

Valuation multiple Investors should look at valuation multiples when deciding whether to enter or exit a stock. Valuation multiples are driven by perceived growth, risk and uncertainties, and investors’ willingness to pay for a stock. There are various multiples to evaluate a stock. In this article, we’ll use the PE (price-to-earnings) ratio due to its […]

Wall Street analysts are expecting McDonald’s (MCD) to post EBIT of $2.1 billion in 3Q16. This represents an EBIT margin of 33.2% compared to 30.7% in 3Q15.

So far in this series, we’ve discussed McDonald’s (MCD) estimated revenue, sources of revenue, and estimated EBIT (earnings before interest and tax) margins.

Jack in the Box (JACK) and Restaurant Brands International (QSR) are analysts’ favorites among the companies we’ve reviewed in this series.

McDonald’s (MCD) is scheduled to announce its 3Q16 results on October 21, 2016. As of October 13, 2016, it was trading at $115.40, a fall of 9.4% from July 25.

In the last four quarters, McDonald’s has beaten analysts’ estimates. In 3Q16, analysts are expecting the company to post EPS of $1.48, a year-over-year rise of 6.1%.

In 2Q17, analysts expect Dunkin’ Brands (DNKN) to post EPS (earnings per share) of $0.62, which represents a rise of 8.8% from its EPS of $0.57 in 2Q16.

For the next four quarters, analysts are expecting Shake Shack (SHAK) to post revenues of $427.9 million, which would be a 27.4% YoY (year-over-year) rise.

In 2Q16, Wendy’s posted EBIT of $71.7 million—an EBIT margin of 18.7% compared to 13.3% in 2Q15. Analysts expected the EBIT margin to be 16.7%.

CMG reported $372 million in food costs in 3Q14. Food costs accounted for 34.3% of the revenue. It was an increase of 70 basis points year-over-year (or YoY).

Franchise revenues include royalties and franchise fees. Royalties are calculated as a percentage of franchise restaurant revenues, which are driven by same-store sales.

The restaurant industry is susceptible to a wide array of risks of macro and micro factors. As a huge global brand, McDonald’s faces several risks.

Food inflation can squeeze a restaurant’s operating margins, but a restaurant can adjust the menu pricing and pass the cost on to customers.

McDonald’s, the world’s largest fast food chain, has over 38,000 restaurants across 120 countries. In 2018, it had approximately $21.0 billion in sales.

Starbucks will report its first-quarter earnings after the market closes on Tuesday. Analysts expect the company to report double-digit EPS growth.

JACK, PZZA, and QSR are the most favored stocks in our group of eight fast-food restaurants, with no analyst recommending a “sell” for their stocks.

McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.

McDonald’s performance is sensitive to any changes in price levels—be it food, labor, or rent. So how much does it cost for McDonald’s to generate revenue?

Allegion provides security solutions for homes and businesses, employing more than 8,000 people and selling products in more than 120 countries across the world. Allegion reported third-quarter 2014 net revenues of $546.7 million, up 3.3% compared to the previous year.

McDonald’s is set to report its second-quarter earnings before the market opens on July 28. Let’s look at analysts’ expectations for the quarter.

For the second quarter, analysts expect Jack in the Box to report revenue of $211.1 million—a fall of 2.1% from the second quarter of 2019.

Innovation, consumer-facing technological development, and brand building with its franchisees are going to be the three crucial aspects of Wendy’s future.

Higher fuel costs put pressure on operating costs, and can squeeze profit margins. The demand side also takes a hit. When gas prices are high, consumers tend to economize on transit by eliminating unnecessary trips.

Despite health-related controversies, fast food companies such as McDonald’s maintain that they provide consumers with choice and convenience.

More Americans are eating out, and they’re eating out more often. The restaurant industry’s share of the food dollar is 51%, up from 25% in 1955.

Analysts expect Wendy’s (WEN) to post adjusted EPS of $399.5 million in the first quarter of 2019, a rise of 5.0% from its $380.6 million in the first quarter of 2018.

In the first quarter of 2019, analysts expect McDonald’s (MCD) revenue to fall 4.1% YoY (year-over-year) to $4.93 billion from $5.14 billion, likely due to its company-owned restaurant count falling.

In the first three quarters of 2018, McDonald’s (MCD) revenue fell 9.3% to $15.86 billion.

McDonald’s (MCD) has posted EBIT (earnings before interest and tax) of ~$8.9 billion, which represents an EBIT margin of 38.8%.

MCD posted SSSG of 3.8%, 1.5%, -1.0%, and 0.2% in 2016, 2015, 2014, and 2013, respectively.

In 2017, McDonald’s (MCD) posted revenues of ~$22.8 billion, which represents a fall of 7.3% from ~$24.6 billion in 2016.

Revenue expectations In 2018, analysts expect McDonald’s (MCD) to post revenue of $21.1 billion, which represents a fall of 7.7% from its revenue of $22.8 billion in 2017. As part of its optimizing strategy, McDonald’s has been refranchising its company-owned restaurants. The refranchising is expected to lower the company’s revenue in 2018. However, some of […]

The initiatives taken by Wendy’s management to drive SSSG appear to have led to a rise in WEN stock and a higher valuation multiple.

For 2018, analysts are expecting Wendy’s (WEN) to post revenue of $1.3 billion, which represents a growth of 2.6%.

Wendy’s (WEN) posted SSSG (same-store sales growth) of 1.3% in the North American region compared to 0.8% in 4Q16.

In this series, we’ll look at analysts’ earnings and revenue estimates for the next four quarters. We’ll also review Wendy’s valuation and analysts’ recommendations.

As of October 25, 2017, McDonald’s was trading at a forward PE multiple of 23.66x compared to 23.57x before the announcement of 3Q17 earnings.

Wendy’s (WEN) has been trading above its peers’ valuation multiple.

As of May 24, 2017, McDonald’s was trading at a PE multiple of 22.6x—compared to 21.3x before the announcement of its 1Q17 earnings.

As of April 19, 2017, McDonald’s was trading at a PE multiple of 21.1x, as compared to 19.9x before the announcement of its 4Q16 earnings.

As of September 16, 2016, these five fast food restaurants were trading at a median PE multiple of 21.4x.

Wendy’s (WEN) posted its 2Q16 results on August 10, 2016. The company posted adjusted EPS (earnings per share) of $0.11 on revenue of $382.7 million.

In 2Q16, McDonald’s revenue declined by 3.6% from $6.5 billion to $6.3 billion.

According to Bloomberg, of the ten analysts surveyed, 45.5% have issued “buy” recommendations for Wendy’s, while 50% have issued “hold” recommendations.

According to a Bloomberg survey of 16 analysts, 62.5% have given “buy” recommendations for JACK, and 37.5% have given “hold” recommendations.

SSSG is an important metric for investors to monitor because it increases a fast-food company’s revenue without increasing capital investment.

Wendy’s Company (WEN) generates its revenue through company-owned restaurant sales, franchisee fees, rental income, and royalty collected from franchisees.