On Thursday, Stephens, a financial services firm, raised its price target on shares of Wingstop (NASDAQ:WING) to $475 from the previous target of $456. This adjustment comes even as the company's shares saw a modest decline at the end of the trading day, despite reporting strong financial results. Stephens continues to hold an Overweight rating on the stock.
The company's performance was highlighted by significant growth, with Wingstop achieving durable double-digit traffic growth and maintaining predictability in unit growth. These factors are expected to garner investor rewards in the second half of 2024. Stephens also noted that Wingstop stands alone in its category for this level of consistent growth.
Further supporting the positive outlook, Wingstop has reported robust trends for the third quarter of 2024, as indicated by foot traffic data. The company has also raised its full-year 2024 same-store sales guidance. This upward revision is a sign of continued strong performance and operational excellence.
In addition to these achievements, Wingstop has increased its long-term Average Unit Volume (AUV) target to $3.0 million. This comes after surpassing the $2.0 million mark in the second quarter of 2024, a goal that was previously set during the fiscal year 2022 investor day. Stephens had previously identified the potential for Wingstop to reach this new AUV target earlier in the year.
The price target increase to $475 is based on an 11-year Discounted Cash Flow (DCF) analysis, as per Stephens' evaluation. The firm's Overweight (Voluntary) rating remains unchanged, reflecting their confidence in Wingstop's continued growth trajectory and solid market positioning.
In other recent news, Wingstop Inc . has reported robust earnings and revenue results for the second quarter of 2024, with substantial same-store sales growth of 28.7% and earnings per share of $0.93, surpassing the consensus by $0.10.
This strong performance has prompted several financial firms to adjust their price targets for Wingstop. Stephens raised its price target to $475, BMO Capital to $360, Morgan Stanley to $415, Raymond James to $420, Truist Securities to $423, and Stifel to $475.
These adjustments reflect the company's strong performance and the confidence of these firms in Wingstop's continued growth. The company has also revised its long-term goals upward, setting its sights on over 10,000 global stores, a significant increase from the previous estimate of 7,000 locations. Wingstop has also increased its average unit volume projections to $3 million, up from the prior $2 million forecast.
In addition to these developments, Wingstop has updated its guidance for 2024. The company now expects comparable store sales growth to be around 20%, up from the previous expectation of low-double-digit growth.
The forecast for unit growth has also been raised, with the company aiming to open between 285 and 300 new stores, an increase from the initial range of 275 to 295. These are recent developments that underline Wingstop's strategic market execution and its ability to navigate cost pressures while maintaining growth and customer value perception.
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