Wells Fargo thinks investors should buy the dip on Wingstop — and the bank isn’t referring to its ranch dressing. Analyst Zachary Fadem initiated coverage of the fast-casual chicken wing chain with an overweight rating. Fadem’s $270 price target suggests shares can rally 22.7% from Tuesday’s close. “We view WING among the best-in-class consumer growth stories, w/ superior unit economics, consistent share gains, & arsenal of [long-term] growth drivers,” Fadem wrote in a Wednesday note to clients. “Hard compares complicate the [first-half] setup, but we see ample reasons for [same-store sales] to re-accelerate.” With this note, Fadem joins the majority of analysts polled by LSEG with buy-equivalent ratings on the stock. Fadem acknowledged a “tough” backdrop for the stock, given its weak comps for the first half of the year, growth-focused price-to-earnings multiple and near-term hurdles. Shares have plunged around 28% since the company’s fourth-quarter earnings report. But Fadem said the stock should be able to re-rate on easier comparables for the second half, and he said there could be a “snap back” in the back half of the year. Wingstop also has a strong free cash flow profile and multi-year sales levers, he said. “Stepping back, we view WING among the premium share takers in QSR & we see opportunity to own high quality growth while sentiment is poor,” Fadem said, using a popular acronym for quick-service restaurants. WING YTD mountain Wingstop, YTD Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
