NEW YORK -- An analyst lowered his rating on Wendy's Co. on Monday, saying that he has concerns that a key revenue metric may disappoint in the third quarter.
Mark Kalinowski of Janney Capital Markets says he is seeing signs that revenue at Wendy's locations open at least a year may be weaker than anticipated in the quarter, as his channel checks show that the September figure was a bit soft.
Revenue at stores open at least 15 months is a key indicator of a restaurant operator's performance because it excludes results from stores recently opened or closed.
Kalinowski said in a client note that he still favors the hamburger chain's long-term plans, but has to account for the likelihood that the third-quarter sales metric may disappoint and that the Dublin, Ohio-based restaurant operator is facing difficult comparisons in the fourth quarter. In addition, the analyst says Wendy's is still contending with high costs for goods such as beef and cheese.
Kalinowski cut Wendy's to "Neutral" from "Buy."
Wendy's shares finished at $4.53 on Friday. They have risen 9 percent from a 52-week low of $4.16 on late August. They rose as high as $5.58 early last November.