2Q26: Not Biggie; Clearing Decks as Turnaround Takes Shape

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M

Idea

August 7, 2026 09:45 PM GMT

Morgan Stanley & Co. LLC

The Wendy's Company | North America

Brian Harbour, CFA

Equity Analyst

2Q26: Not Biggie; Clearing

Decks as Turnaround Takes

Shape

Hilary Lee, CFA

Research Associate

Kelly Merrill

Research Associate

The Wendy's Company (WEN.O, WEN US)

What’s Changed

Restaurants | United States of America

The Wendy's Company (WEN.O)

From

To

Price Target

$7.00

$5.50

US comps continue to be weak -HSD% with little improvement

seen QTD with revenue ahead due to increased ad fund rev

while adj EBITDA and EPS ~in-line. New mgmt reasonably pulls

guidance, will discuss new turnaround plan more in-depth next

quarter. Remain cautious given low visibility for now.

Stock Rating

Industry View

Price target

Shr price, close (Aug 6, 2026)

Mkt cap, curr (mm)

52-Week Range

Fiscal Year Ending

Underweight

In-Line

$5.50

$7.39

$1,413

$10.84-6.07

12/25 12/26e 12/27e 12/28e

EPS ($)**

Prior EPS ($)**

P/E

EPS ($)§

Div yld (%)

0.88

9.2

0.87

8.0

0.51

0.55

14.4

0.57

5.7

0.57

0.70

13.0

0.64

4.3

0.71

0.86

10.4

0.71

4.9

US SSS -7.0% with April -6.4%, May -7.5% and June -7.0%. Trends said to continue

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

in July. 2H improvement not expected by mgmt yet.

Quarterly EPS ($)

Int'l decelerates to-2.3% below modestly positive expectations of+0.3%/0.4% for

Quarter

2025

MSe/St. We turn more cautious in 2H and expect 3Q to be negative.

Q1

Q2

Q3

Q4

0.20

0.29

0.24

0.16

Key Takeaways

New mgmt have outlined basics of a turnaround plan with 5 key areas of focus

led by quality of food and value. More details to come next quarter.

2026e 2026e

Prior Current

0.13

0.12

0.12a

0.18a

0.13

0.08

2027e 2027e

Prior Current

0.12

0.23

0.18

0.17

0.13

0.18

0.16

0.10

e = Morgan Stanley Research estimates, a = Actual Company reported data

'26 guidance withdrawn given lack of improving trends and visibility. Dividends

cut in half to $0.07 to give greater flexibility on capital allocation plans.

…