Strength Seen in Wendy's (WEN): Can Its 6.0% Jump Turn into More Strength?

Wendy's (WEN) shares soared 6% in the last trading session to close at $12.01. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.5% loss over the past four weeks.

Wendy’s recent stock rally reflects likely investor optimism around its innovation-led growth strategy and digital upgrades. The launch of the “100 Days of Summer” campaign, expanding AI technology, and global unit growth efforts are driving customer engagement and operational efficiency. Combined with disciplined capital returns, these moves are boosting confidence in sustained performance.

This hamburger chain is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of -3.7%. Revenues are expected to be $557.59 million, down 2.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Wendy's, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on WEN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Wendy's is part of the Zacks Retail - Restaurants industry. Cheesecake Factory (CAKE), another stock in the same industry, closed the last trading session 1.8% higher at $59.99. CAKE has returned 12.6% in the past month.

For Cheesecake Factory, the consensus EPS estimate for the upcoming report has changed -0.9% over the past month to $1.05. This represents a change of -3.7% from what the company reported a year ago. Cheesecake Factory currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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