Finding dinner out is getting to be a bit of a challenge in 2025, as restaurants are running into significant problems. In fact, burger chain giant Wendy’s (WEN) closed several restaurants in 2024, citing a lack of performance. However, even as it closed some, it opened others in unexpected locations. The end result proved little good for Wendy’s, as shares were down modestly in Thursday afternoon’s trading.
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Basically, the cause is about what you would expect. Inflation continues to slam the American consumer hard, and consumers pulled back in several key areas. One of these was restaurant spending, and pulling up for that sack of burgers—which now costs significantly more than it did just a year or two ago—seems like a less attractive option. In fact, most of 2024 was a disaster for restaurants like Wendy’s, as overall visits fell from January to October.
But Wendy’s got off light, a CNBC report noted, compared to some. The report noted that, in 2024, 26 different restaurant companies filed for bankruptcy. That is over three times the amount seen in 2020, back when many restaurants were shut down or severely limited by government mandate. With diners taking what dollars they had left to higher-end chains like Chipotle (CMG), that left Wendy’s and many of its contemporaries on the back foot.
Australian Expansion
But Wendy’s is not giving up lightly. While the American market may be starting to sour, it is instead looking in a whole new direction: down under. A report from Australia’s 9News detailed plans for Wendy’s to make an expansion in Australia, which is already being called “…a major expansion.”
The report noted that the plan is to open 200 new locations in Australia by 2034. This is based on a deal originally signed in 2023. Following a pop-up event in Sydney that went better than expected, that lit a little extra fire under Wendy’s to get the rollout moving in earnest. While official dates were not noted, we do know it will be sometime this month. A social media post declared: “See you soon Australia. Arriving January 2025.”
Is Wendy’s Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on WEN stock based on four Buys, 10 Holds and two Sell assigned in the past three months, as indicated by the graphic below. After a 13.01% loss in its share price over the past year, the average WEN price target of $20.88 per share implies 29.45% upside potential.
