WEN A Spicy Ratings Change for Wendy’s

With this report, we upgrade the shares of Wendy’s (WEN) to Buy from Neutral. We believe that August 2019 same-store sales for Wendy’s were easily the best such month for the concept so far this year, with the return of Spicy Chicken Nuggets proving to be a large — maybe even massive — hit with guests. In fact, we believe that August 2019 was perhaps the best or second-best month for Wendy’s samestore sales so far this decade. While there was nothing unusual about July 2019 (the start to Q3), if Wendy’s can retain some of the momentum that it apparently gained during August, that bodes well for the brand for September and as it heads toward its planned October 2019 Analyst Meeting.

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