CA - Wendy's: Overleveraged Balance Sheet And Rich Valuation Make It A Sell

2024-02-02 09:52:33 ET

Summary

• Wendy's is the third-largest quick-service restaurant in the United States with over 7000 locations.
• In recent years, the company has been losing market share to competitors like McDonald's and Burger King as a result of being late in many categories.
• Wendy's is playing catch up to competitors in the digital space and the prospects of international expansion seem dim.
• I rate shares of Wendy's as a sell based on these risk factors, seeing little value in the current share price.

Investment Thesis

Wendy's ( WEN ) is one of the largest quick-service restaurants and fast food chains in North America that is known for their burgers, sandwiches, and other food items. Founded almost 55 years ago, the company expanded rapidly in the 70s and 80s and now has over 7000 locations. Today, it's the third largest fast-food chain in the United States. However, in recent years, Wendy's has been struggling to keep up with competitors and maintain a competitive market position....

For further details see: