Wingstop could be poised for a big year and a major rebound for its shares, according to Wedbush. The investment firm added the chain restaurant stock to its best ideas list, saying in a note to clients Wednesday that the stock looks like a smart bet in an uncertain environment for the sector. "We continue to believe upside to 2022 SSS growth expectations exists (including check pointing to Q1 upside), and view WING as relatively well-positioned in both recessionary and expansionary environments due to its historical outperformance, its relative value positioning, and the uptick in the national ad fund this year," the note said. Nick Setyan is the Wedbush analyst who covers Wingstop. Shares of Wingstop have struggled in 2022, falling 34% year to date. Wedbush had a price target of $165 per share for Wingstop, which is more than 44% above where the stock closed on Tuesday. The stock is already trading above the industry's average earnings multiple, according to FactSet, but that should not be a major concern, Wedbush said. "WING is also much cheaper than it looks, as the special dividends distort its valuation premium. Even ignoring the above and valuing shares on our lowered 2023 FCF/share estimate, WING is still worth $165," the note said. —CNBC's Michael Bloom contributed to this report.
Charles Morrison, CEO, Wingstop
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Wingstop could be poised for a big year and a major rebound for its shares, according to Wedbush.