The Wendy’s Company (NASDAQ:WEN) stock surged 14.05% in the pre-market trading session on Tuesday, following reports of renowned investor Nelson Peltz‘s Trian Fund Management is rallying support for a potential bid to privatize the fast-food chain.
Trian has been in discussions with external investors, including those in the Middle East, over the past few weeks to finance a possible takeover. Trian, which currently owns 16% of Wendy’s along with Peltz, has had a longstanding relationship with the fast-food chain since a 2005 activist campaign, reported the Financial Times on Tuesday.
Despite Trian’s interest, no formal approach to acquire Wendy’s has been made, and there’s no certainty that the financing discussions will lead to a takeover bid, according to the report.
In February, Trian stated in a regulatory filing that Wendy’s was “undervalued”, suggesting the company to explore strategic alternatives. Wendy’s responded by stating it would “carefully evaluate” any takeover approach from the activist investor.
Wendy’s and Trian Fund did not immediately respond to Benzinga‘s request for comments.
Wendy's Turnaround Faces Pressure
Wendy’s shares have been on a downward spiral, dropping over 45% in the past year. Currently, Wendy’s is in the initial phase of its “Fresh Start” turnaround plan, aimed at reviving its US sales by enhancing its menu and shutting down underperforming locations.
Nearly six months after announcing its expansion plan, Wendy's U.S. footprint has shrunk, with store counts declining by double digits in several states. Its store locator showed 5,675 U.S. locations as of Friday, about 200 fewer than at the end of September 2025, as per a report by Inc.com.
The company’s first-quarter adjusted earnings per share of 12 cents managed to beat the analyst consensus estimate of 10 cents, and quarterly sales of $540.637 million (+3.3% year over year) outpaced the Street view of $517.965 million. The fast food company also affirmed fiscal 2026 adjusted EPS guidance of 56 cents to 60 cents, versus the analyst estimate of 57 cents.
However, the U.S. company-operated restaurant margin fell 340 basis points year over year to 11.4%. The decrease was primarily due to a decline in traffic, beef price inflation, and labor rate inflation.
On Monday, JPMorgan downgraded stock to "Underweight" from "Neutral," citing weak sales, franchise profitability concerns, leadership uncertainty and high debt as risks to its turnaround strategy through 2028. Analysts also cut the stock's price target to $6 from $7, below its recent closing price of $7.30.
Benzinga's Edge Rankings place Wendy’s in the 57th percentile for quality and the 44th percentile for value, reflecting its average performance in both areas. Benzinga’s screener allows you to compare Wendy’s performance with its peers.
WEN Price Action: On a year-to-date basis, the stock declined 17.26%, as per Benzinga Pro. On Monday, it closed 7.40% lower at $6.76.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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