Wendy's downgraded at RBC Capital Markets amid slowed same-store sales in fast-food industry
The Wendy's Co. shares are down 1.4% in Tuesday premarket trading after the company was downgraded to sector perform from outperform at RBC Capital Markets on slowing same-store sales in the second quarter and in July. The bank lowered the price target to $11 from $12. Analysts believe there is a slowdown across the fast-food industry, though Wendy's is feeling it more than others. However, Wendy's has the tools, such as its value platforms, to regain share, RBC wrote in a note. McDonald's Corp. same-store sales have slowed, but RBC analysts said in a separate note on the fast-food industry, also published Tuesday, that the company is poised for two-year stacked growth. And while the bank forecasts a second-quarter same-store sales decline of 1% for Burger King U.S., the bank believes the chain, which is owned by Restaurants Brands International Inc., , rebounded in recent weeks due to a Mac n' Cheetos promotion and other value marketing. Mac n' Cheetos are macaroni and cheese bites covered in Cheetos flavoring. Wendy's shares are down 9.7% for the year so far while McDonald's is down 0.1% and Restaurant Brands International is up 12.9%. The S&P 500 Index is up 6.2% for the year to date.
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