Wendy's earnings improved every quarter this past year, and its stock came along for the ride. On Tuesday, the Relative Strength (RS) Rating for Wendy's stock climbed into a new percentile, as it got a lift from 67 to 73.
The upgraded 73 RS Rating shows that Wendy's stock price has outperformed 73% of all stocks this past year. It's closing on the 80 or better RS Rating that the best stocks to buy and watch have as they launch their biggest climbs. See if Wendy's can continue to show renewed price strength and hit that benchmark.
Wendy's Stock In Top 10% Overall
Among its other key ratings Wendy's has a strong 93 Earnings Per Share Rating, putting it in the top 7% of companies for profit growth the past three years, with special focus on the last two quarters. And Wendy's stock has a 90 Composite Rating, a broad gauge of a company's strength based on a group of fundamental and technical metrics It also boasts an excellent A SMR Rating (sales+profit margins+return on equity). One yellow flag to keep an eye on is its D Accumulation/Distribution Rating on an A+ to E scale. The D rating shows that institutional investors such as mutual funds and insurance company funds are selling more shares than buying. Watch for that to improve to a C or better.
One thing that might persuade those big money investors to jump aboard Wendy's stock is if it continues to put up strong earnings and revenue growth numbers. Over the last four quarters its profit growth improved every quarter and its sales grew or held steady during those quarters.
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Wendy's stock is working on a flat base with a 23.88 buy point. See if it can break out in volume at least 40% higher than normal. On Tuesday, shares of the Dublin, Ohio-based company slid 0.3% to 21.71 amid market consolidation. Wendy's formed a cup base from January 2022 to August. From there it's risen in stair-step fashion, a bullish pattern.
Sales, Profits Improved Over Last Year
Wendy's reported 38% earnings growth last quarter, to 22 cents per share. That came after it reported a 15% year-over-year decline, an 11% dip and then a 26% increase the prior three periods. Sales grew 13% last quarter to $536.5 million, following on the heels of 6% growth, 9% and then 13%.
Wendy's stock holds the No. 4 rank among its peers in the Retail-Restaurants industry group. It's in good company in the top five. Full service restaurant chain Texas Roadhouse, which serves BBQ ribs, steaks and more, is No. 2 in the group. Burrito jefe Chipotle Mexican Grill is No. 1 and chicken wings king Wingstop is No. 3. Olive Garden parent Darden Restaurants holds down the anchor No. 5 spot.
IBD's unique RS Rating tracks technical performance by showing how a stock's price action over the last 52 weeks measures up against that of the other stocks in our database.
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