Wendy's drops after JPM cuts to 'neutral' on lack of defined turnaround strategy

Shares of fast food chain Wendy's WEN.O drop 1.8% to $8.34 premarket after J.P. Morgan cuts to "neutral" from "overweight"; trims PT to $9 from $12

Brokerage says reviving U.S. development would require heavy capital and opex investments, making a private ownership structure more feasible for a successful turnaround

Any significant capital allocation towards the revamp might impact free cash flow through FY28

U.S. turnaround hinges on significant average unit volume (AUV) growth toward $2.3–$2.5 mln, but achieving this within three years is highly unlikely - JPM

Out of 29 analysts, five rate the stock "strong buy" or "buy", 19 rate it "hold" and five "strong sell" or "sell" - data compiled by LSEG

Up to last close, shares were down 47.9%​ YTD