The recent pullback in Wendy’s shares could provide an enticing entry point for investors, according to JPMorgan. On Monday, the Wall Street investment bank upgraded shares of the burger chain to overweight from neutral, even while lowering its price target by $2 to $15. That still implies more than 19% upside from Friday’s close. The call comes as the fast food company’s shares have slumped in recent months, falling more than 36% in the past six months and more than 23% this year, underperforming the S & P 500, which has declined more than 1% and more than 3% in the same periods. “Wendy’s current share price provides a value-oriented opportunity as we see significant upside to equity value with 6-7% [free cash flow] yield (F26-28) with potential for this to step further up to 8.5%+ ex-funded franchise development,” analyst Rahul Krotthapalli wrote in a 24-page report. “This view is also formed after significantly de-risking the achievement of near term comps expectations and opportunity for medium-long term development – especially in underpenetrated international markets.” WEN 6M mountain Wendy’s over the past six months. Between 2025 and 2028, Krotthapalli said that Wendy’s free cash flow growth profile is “healthy,” with the Ohio-based company generating $605 million over the course of those years as the performance of its stores stabilize and start improve. That could lead to annual shareholder returns in the mid- to high teens, he estimated. The analyst also sees Wendy’s opening 700 stores — 200 in the U.S. and 500 internationally — through 2028 assuming an annual growth rate of 2.2%, noting particular room to expand overseas. Krotthapalli is in the minority on Wall Street, where only five analysts covering Wendy’s rate it the equivalent of a buy, and 21 rate it hold, according to LSEG. Analysts’ consensus price target of $15 implies almost 23% upside ahead. Shares were more than 1% higher in premarket trading Monday on the heels of the JPMorgan upgrade.
