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Investing.com — The Wendy’s Co (NASDAQ:WEN) stock tumbled Monday morning after BMO Capital analyst Andrew Strelzik downgraded the company’s shares to Market Perform from Outperform.
Strelzik also lowered the firm’s price target on Wendy’s to $22 from $28, writing in a note to investors that against the macro backdrop of rising pressures on discretionary spending, BMO’s downgrade reflects its view that the company is less well-positioned for a tighter U.S. consumer spending environment compared to some quick service peers.
As a result, the analyst sees increased risk to comp and margin expectations and has tempered its 2022/2023 EBITDA outlook to below consensus.
“Valuation is undemanding, but it will be difficult to argue for multiple expansion if estimates are moving lower,” added Strelzik.
Wendy’s stock dipped 2.5% following the downgrade.
