13 Best Fast Food Stocks to Buy

10. The Wendy’s Company (NASDAQ:WEN)

Number of Hedge Fund Holders: 30

The Wendy’s Company (NASDAQ:WEN) is one of the best fast food stocks to buy. On December 17, Goldman Sachs reduced its price target on The Wendy’s Company (NASDAQ:WEN) from $9 to $8 and maintained its Sell rating.

Previously, on December 3, JPMorgan also lowered its price target on The Wendy’s Company (NASDAQ:WEN) from $12 to $9 and downgraded its rating from Overweight to Neutral. The research firm cited weaker US system economics, high capital costs, and unclear plans for improvement.

JPMorgan’s analysis showed that The Wendy’s Company’s (NASDAQ:WEN) efforts to restore development remain constrained as US franchise stores struggle with average unit volumes of $1.9 million, which falls short of the $2.3 million to $2.5 million needed to make new builds feasible. The research firm noted that the company’s US franchise base faces pressure from a 4% year-over-year drop in average unit volumes in fiscal 2025. This is estimated to lower average franchise profitability to about $100,000 to $150,000. After overhead and debt service costs, this may leave just $50,000 to $80,000. This limits funds for store remodels or tech upgrades, which JPMorgan expects the company will have to contribute materially to cover. The research firm forecasts over $700 million in capital spending from fiscal 2026 through fiscal 2028.

Additionally, JPMorgan pointed out that The Wendy’s Company (NASDAQ:WEN) has only installed digital menu boards in about 700 of its 5,700 locations in the US. The remaining rollout is expected to cost around $100 million. JPMorgan believes this will likely be funded by the company, given the current franchise economics.

The Wendy’s Company (NASDAQ:WEN) is an American fast food corporation that operates and franchises more than 7,000 restaurants around the world.