MAGA billionaire Nelson Peltz says ailing burger chain is undervalued… and shares skyrocket 19%
A $5 burger is a billion-dollar craving on Wall Street.
On Wednesday, a MAGA billionaire who shakes up companies sent investors into a frenzy after declaring Wendy's is worth far more than its current stock price suggests.
Nelson Peltz said in a filing with the Securities and Exchange Commission that the chain - which suffered an 11 percent sales slump last year - is significantly undervalued. That sent shares soaring nearly 19 percent.
Peltz - dad to socialite Nicola Peltz and the father-in-law of nepo baby Brooklyn Beckham - said his firm, Trian Fund Management, has been in talks with banks and backers about a deal that could see it take a controlling stake in Wendy’s.
Wendy’s shares had slumped to around $6.75 last week after the company's dismal earnings report. But shares jumped back above $8 following news of Peltz’s filing.
Peltz has long ties to Wendy’s. His firm first invested in the chain in 2005, and he later served as its chairman for 17 years, stepping down in 2024.
And this isn't Peltz's first flirtation with owning Wendy's. In 2022, he eyed a possible takeover bid for the chain.
Currently, Peltz personally owns a 16.24 percent stake in Wendy's, slightly up from 16.09 percent in July of last year. His firm, Trian, separately holds a 7.85 percent stake.
Activist investor Nelson Peltz has thrown a spotlight on Wendy's, claiming in an SEC filing that the fast-food chain's stock is significantly undervalued - a revelation that sent shares soaring as much as 18.6 percent
Nelson Peltz is dad to socialite Nicola Peltz and the father-in-law of nepo baby Brooklyn Beckham
The Dublin, Ohio-based chain has endured a bruising stretch. US same-restaurant sales fell 11.3 percent in the quarter ended December 28, compared with growth of 4.1 percent a year earlier.
Meanwhile, rivals like Yum Brands, owner of Taco Bell, and McDonald's have managed to boost sales thanks to value meals and menu innovations.
One big reason Peltz believes Wendy’s is undervalued comes down to how cheaply the stock is priced compared to its rivals.
Investors currently value Wendy’s at about 11 times its expected earnings over the next year.
By comparison, McDonald’s trades at more than 24 times earnings, and Yum Brands - which owns Taco Bell - trades at nearly 24 times as well.
That measure is known on Wall Street as the ‘price-to-earnings ratio,’ or P/E ratio — a technical term that simply shows how much investors are willing to pay for every $1 a company earns.
In simple terms, investors are paying more than twice as much for every dollar of profit from McDonald’s or Yum than they are for Wendy’s.
To Peltz, that gap suggests Wendy’s stock could have significant room to rise if the company turns its performance around and wins back confidence.
This isn't Peltz's first flirtation with the burger giant. Back in 2022, he eyed a possible takeover bid for Wendy's
Nelson Peltz said in a filing with the Securities and Exchange Commission that the chain is significantly undervalued. That sent shares soaring nearly 19 percent
Wendy’s said its board would ‘carefully review’ any proposals from Trian, adding it remains focused on a plan to revive US sales and expand internationally.
This includes a focus on consistent lower prices rather than short-term deals.
Meanwhile, Wendy's announced in November that it would be closing 300 restaurants across the US in an effort to cut costs and win back customers who say its meals have simply become too expensive. That would mean a cut of about 5 per cent of its near 6,000 locations.
Wendy's had also shuttered 140 locations in 2024, joining many of its competitors in facing the harsh reality that Americans are cutting back on takeout as prices soar and paychecks shrink.
