WEN
The Wendy's Company
$7.81
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 62.7% below fair value
You pay
$7.81
Bear
$17.52
Fair
$20.92
Bull
$24.32
Bear
$17.52
+124.3%
$1.30 × 18x P/E
Fair
$20.92
+167.8%
$1.30 × 22x P/E
Bull
$24.32
+211.4%
$1.30 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
6.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $8.00 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $20.92 per share.
Warnings
The company's reported profits differ from official accounting profits by 53%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $10.87 (below our primary estimate by 61%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $8.00 (from 51 analysts). Our estimate is 248% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples