Wendy’s downgraded to Neutral at Northcoast on profit headwinds, share risk

As previously reported, Northcoast analyst Jim Sanderson downgraded Wendy’s to Neutral from Buy with no price target. The firm, which lowered its 2023 adjusted EPS forecast to 96c from 99c and introduced a 2024 adjusted EPS forecast of $1.06, notes that these compare to Street consensus non-GAAP EPS for 2023 and 2024 of 98c and $1.13, respectively. The firm believes Wendy’s faces headwinds that will slow profitable sales growth while putting market share at risk in the U.S. Higher prices could stall organic sales growth, but slowing global economies and more intense price competition could drive deeper traffic losses, potentially forcing Wendy’s to compete more aggressively on promotions, the analyst tells investors.