Oppenheimer downgrades Wendy’s, reveals top 2023 restaurant picks

Oppenheimer analyst Brian Bittner downgraded Wendy’s (WEN) to Perform from Outperform without a price target. The analyst recommends investors be "extremely selective" in owning restaurant stocks in 2023, saying indicators point to a more challenged setup for consumer spending trends following a robust past two years. In addition, companies face a "tough path" for earnings upside as consensus estimates already underwrite an optimistic scenario for same-store-sales and margin expansion, Bittner tells investors in a research note. Wendy’s shares have gained 40% since Trian Management disclosed a stake on May 24, 2022, creating a "fairly balanced" risk/reward and valuation, contends the analyst. He also forecasts Wendy’s 2023 EBITDA to come in modestly below consensus. Bittner revealed his 2023 restaurant picks as Restaurant Brands (QSR), Darden (DRI) and McDonald’s (MCD).