Key Takeaways

Wendy's ( WEN ) stock got an upgrade from JPMorgan analysts on Monday, but the upgrade also came with a lowered price target as analysts are staying cautious on an uncertain fast-food industry.

Last week, Wendy's and burger-making rival McDonald's ( MCD ) reported weaker first-quarter sales than analysts had expected. McDonald's said it has seen economic pressures spread from low- to middle-income consumers, and Wendy's said it could see sales decline rather than grow in 2025.

JPMorgan analysts upgraded Wendy's stock to "overweight" from "neutral" on Monday, but said they now expect the stock to reach $15 by the end of 2026, rather than $17 previously.

The analysts are slightly more bullish than average on Wendy's stock, which has a consensus price target of about $14, according to Visible Alpha data. The target, above Wendy's Friday close of $12.55, comes as analysts are divided on how to rate the stock with two "buy," four "hold," and three "sell" ratings.

Wendy's current price "provides a value-oriented opportunity as we see significant upside," JPMorgan analysts said, adding the fast-food giant has room to improve its free cash flow with a "higher focus on franchise accountability," and grow its international footprint. However, the analysts noted a 2% decline in fast-food traffic compared to the last several quarters and pre-pandemic levels as a reason to be cautious.

Wendy's shares were up 3% in early trading Monday. Still, they've lost about a fifth of their value since the start of the year.

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