Boston, MA 01/14/2013 (wallstreetpr) – Shares of Wendy’s Co (NASDAQ:WEN) rose as much as 10 percent on Monday before closing the regular session up 6.4 percent at $8.98. This rise was sparked by the upbeat 2014 outlook which the fast-food restaurant issued.
The newly issued outlook for 2014 exceeds the expectation which analysts had pegged on the company. This juicy outlook comes as the company undergoes brand overhaul, including elimination of some same-restaurant locations.
The Wendy’s Co (NASDAQ:WEN) good news to investors didn’t stop at widely positive outlook, the company also announced shares buyback program amounting to $275 million. All these will come amid ongoing cost reduction through franchising of more restaurants. According to the chief financial officer Todd Penegor, the company now feels like it is on the right track to becoming stronger.
Cautious analysts
That Wendy’s Co (NASDAQ:WEN) has issued widely positive forecast for 2014 and has announced fat shares buyback should excite investors. Nonetheless, many analysts are seeing beyond this good news to question the chances of long-term success available to the company.
The company is operating in an environment that present intense competition. There is also the problem of rising food costs which effectively eliminated profits across the industry.
There is no doubt that Wendy’s Co (NASDAQ:WEN) has shown its ability to beat the industry in the short-term, but there is little evidence if any that it will sustain this momentum over a longer-term. Perhaps the company needs to remain strongly ahead of peers in innovation to continue outperforming the industry. However, analysts remain measured in recommending the stock with about 11 assigning it a “hold”, five have a “buy” rating on the stock while two analysts are recommending a “sell” on the stock.
Bottom line
The management of Wendy’s Co (NASDAQ:WEN) is actually getting many things right. The company should continue its short-term stellar performance and even the long-term will be secure if the ongoing sale of branches is executed properly.
It is a good idea to have Wendy’s Co (NASDAQ:WEN) in the watch-list as it presents potential wealth opportunity.
