Activist investor Nelson Peltz’s Trian Fund Management increased its holdings in Walt Disney (NYSE:DIS) stock in Q2, per the latest 13F filing. At the same time, the hedge fund cut its stake in Wendy’s (NASDAQ:WEN) stock.
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Peltz increased his holdings in DIS stock by 9% in Q2. The move comes after the billionaire investors made peace with the entertainment and media giant’s management earlier this year. However, the filing reveals that the Trian Fund reduced its holdings in Wendy’s stock by 4%.
Against this backdrop, let’s look at what Street recommends for DIS and WEN stocks.
Is Disney a Good Stock to Buy Now?
Disney stock has had a poor showing so far this year. It has gained about 2% year-to-date, underperforming broader market averages like the S&P 500 Index (SPX) by a wide margin. Moreover, DIS stock is down about 27% in one year.
Nonetheless, Disney recently delivered better-than-expected Q3 earnings. During the same period, Disney+ core subscribers and ARPU (average revenue per user) improved. Also, the company managed to lower losses in the direct-to-consumer business. Management remains upbeat and expects its direct-to-consumer business to achieve profitability by the end of 2024. In addition, its Parks and Experiences business continues to drive earnings and cash flows.
While Disney focuses on reaccelerating growth, analysts remain cautiously optimistic about its stock. Overall, it has received 12 Buy, five Hold, and two Sell recommendations for a Moderate Buy consensus rating on TipRanks. Analysts’ average 12-month price target of $110.88 implies 24.85% upside potential from current levels.
Is Wendy’s a Buy, Sell, or Hold?
Like Disney, shares of fast food chain Wendy’s also disappointed investors over the past year and lagged broader markets. Further, its same-restaurant sales growth rate showed a sequential deceleration during the second quarter of 2022.
However, Wendy’s reiterated its full-year global systemwide sales growth outlook. It expects global systemwide sales to increase by 6-8% in 2023, driven by mid-single-digit global same-restaurant sales and an increase in global net units. This implies that Wendy’s growth could accelerate in the second half of the year. In addition, strategic pricing actions, promotions, and menu innovation will likely support its growth.
Though Wendy’s initiatives are encouraging, the consumer continues to face pressure from macroeconomic factors, keeping analysts cautiously optimistic about the stock. Wendy’s stock has received seven Buy, nine Hold, and one Sell recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $24.83 implies 14.95% upside potential.
