Wendy's: CEO Shakeup Suggests Shifting Strategic Priorities After a Challenging 2023

On Jan. 18, no-moat Wendy's announced that Kirk Tanner will replace Todd Penegor as CEO, effective Feb. 5. We expect that the incoming CEO's New Year's resolutions will include a laser focus on turning around the firm's comparable-store sales performance, increased emphasis on Wendy's fledgling digital business, and prioritization of store development as smaller competitors are forced to pull back on development aspirations. We don't anticipate making any revisions to our $21 intrinsic valuation for the firm, nor our Standard Morningstar Capital Allocation Rating in light of the transition, particularly since the firm maintained its full-year 2023 guidance.