Analysts Cautious on The Wendy’s Company (WEN) Amid Cost and Margin Pressures

Core Viewpoint - The Wendy's Company (NASDAQ:WEN) is facing increased analyst caution due to cost and margin pressures, leading to reduced price targets from multiple firms [2][4]. Group 1: Analyst Ratings and Price Targets - RBC Capital lowered its price target for Wendy's from $9.00 to $8.50 while maintaining a "Sector Perform" rating, citing understated G&A expense assumptions [2]. - Goldman Sachs reduced its price target from $9 to $8 and reiterated a "Sell" rating, reflecting concerns over weak U.S. system economics and declining average unit volumes [4]. - JPMorgan also downgraded its price target from $12 to $9 and changed its rating to "Neutral," indicating caution due to elevated capital requirements [4]. Group 2: Financial Projections and Risks - RBC Capital projects that fiscal 2026 G&A expenses could rise to $285-290 million, significantly above the Street estimate of $264.6 million [2]. - The firm anticipates a potential decline in restaurant-level margins (RLMs) from 13.5% to 12.7%, which could create a 3.5% headwind for EPS [3]. - RBC Capital has lowered its EPS forecast for 2026 by 13.0% to $0.68 and for 2027 by 11.8% to $0.79 due to these pressures [3]. Group 3: Company Overview - The Wendy's Company operates over 7,000 restaurants globally, focusing on burgers, chicken, and quick-service dining [5].