Jefferies has reiterated a Buy rating on Wingstop and kept its price target at $350.00, a level that implies meaningful upside from the stock's most recent trading price of $271.39. The broker's note reiterating the stance emphasizes that near-term earnings and EBITDA should land roughly in line with expectations, even though Jefferies anticipates negative same-store sales for the fourth quarter.
Investors should note the company’s next scheduled earnings release is February 18. Jefferies characterizes the year-end softness in sales as largely known - citing peer commentary at ICR and weaker industry data - and says those factors are already reflected in Wingstop’s current valuation, which sits toward the lower bound of its historical range.
Valuation metrics highlighted in the research note show a price-to-earnings ratio of 44.48 and a PEG ratio of 0.54. According to InvestingPro data referenced by the broker, the stock's trailing P/E appears low relative to expected near-term earnings growth, and the broader analyst consensus registers at 1.52, or Strong Buy.
Jefferies expects investor attention to remain focused on same-store sales and traffic trends as Wingstop exits the fourth quarter. The firm notes that conservative guidance from management could create the potential for upside surprises if results or forward-looking commentary prove stronger than anticipated. Jefferies also points to what it calls "tangible drivers near term" that underpin its continued Buy recommendation for the restaurant chain.
Several other broker actions and company developments have emerged recently. Melius Research upgraded Wingstop from Hold to Buy and set a $350.00 price target, citing the company's strong growth potential including high-teens unit growth and margin expansion driven by an asset-light model. Freedom Capital Markets initiated coverage with a Buy rating and a $320.00 price target, which implies roughly 33% upside from current price levels.
Jefferies reiterated its Buy and $350.00 target following meetings with Wingstop’s leadership team in Australia. TD Cowen kept a Buy rating and a $280.00 price target, expressing confidence in new Chief Operating Officer Raj Kapoor amid recent management changes.
On the product side, Wingstop has introduced a limited-time Hot Honey Trio, a nationwide offering that includes three flavor variations. These analyst actions and menu initiatives paint a picture of strategic growth and product experimentation at the company.
For market participants, the key near-term items to watch are the company’s February earnings release, same-store sales trajectory, management’s guidance, and whether the tangible near-term drivers cited by Jefferies translate into measurable improvements in traffic and margins.
Key points
- Jefferies reiterated a Buy rating on Wingstop with a $350.00 price target; the stock was last at $271.39.
- The firm expects earnings and EBITDA roughly in line with expectations despite forecasting negative same-store sales for Q4; next earnings date is Feb 18.
- Other broker moves include upgrades and initiations from Melius Research, Freedom Capital Markets, and a maintained Buy from TD Cowen; Wingstop launched a limited-time Hot Honey Trio nationwide.
Risks and uncertainties
- Negative same-store sales in the fourth quarter could pressure revenue and investor sentiment - affecting restaurant and consumer discretionary sectors.
- Conservative guidance from management could suppress near-term stock performance even if results are in line - a risk for equities tied to growth expectations.
- Broader industry weakness cited through peer commentary and weaker industry data may continue to weigh on traffic and sales - relevant to foodservice and quick-service restaurants.