Wendy's Stock Sinks To Six-Year Low After Soft Outlook

Core Insights - Wendy's stock is currently testing key support levels, hitting a new low amid concerns over declining sales and weak guidance for 2026 [1] Financial Performance - Wendy's reported adjusted earnings of 16 cents per share on revenue of $543 million, slightly exceeding analyst expectations [2] - U.S. same-restaurant sales fell by 11.3%, and company-operated margins decreased to 12.7% from 16.5%, impacted by reduced traffic and increased food and labor costs [2] Future Outlook - The company's 2026 guidance is conservative, projecting adjusted EPS between 56 and 60 cents, below Wall Street's expectation of 86 cents, with global systemwide sales expected to remain flat [3] - Concerns are growing that the turnaround plan, Project Fresh, may take longer to yield results in the U.S. market [3] Analyst Reactions - Following the earnings report, BMO Capital reduced its price target from $11 to $9, while Evercore ISI lowered its target from $9 to $8, both maintaining neutral ratings [4] - Short interest has risen to over 50% of Wendy's freely traded shares, indicating a crowded bearish sentiment [4] Technical Analysis - The stock is trading 7.3% below its 20-day simple moving average (SMA) and 15.5% below its 100-day SMA, reflecting significant bearish momentum [5] - Over the past year, shares have decreased by 53.57%, nearing their 52-week lows [5] - The RSI is neutral, while the MACD is below its signal line, suggesting ongoing bearish pressure [6] Market Performance - Wendy's shares fell by 7.02% to $6.95, marking a new 52-week low [8] - Key resistance is identified at $7.50, with key support at $6.50 [8]