William Blair analyst Sharon Zackfia has reiterated their bullish stance on WING stock, giving a Buy rating on October 3.
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Sharon Zackfia’s rating is based on a combination of factors that highlight both the challenges and opportunities for Wingstop. Despite a projected decline in domestic same-store sales by about 4% for the third quarter, which is slightly worse than consensus expectations, Zackfia notes that this is largely due to macroeconomic factors and a tough comparison from the previous year. These challenges are offset by Wingstop’s strong global systemwide unit growth, which is expected to expand in the high teens.
Furthermore, Zackfia anticipates a 10% increase in total revenue, although slightly below consensus estimates, and highlights the company’s ability to expand its company-owned unit-level margins by 40 basis points. Additionally, a 12% increase in high-margin franchised revenue is expected, which will contribute to an 8% increase in adjusted EBITDA. Despite some contraction in EBITDA margins, these positive growth drivers support the Buy rating, as they suggest potential for accelerating trends into the fourth quarter and beyond.
In another report released on October 3, TD Cowen also maintained a Buy rating on the stock with a $320.00 price target.