The equity received a downgrade from Stifel to "hold" from "buy"
Fast food giant Wendy's Co (NASDAQ:WEN) is down 12.4% to trade at $25.28 at last check, as traders move to take profits after the equity surged to an all-time high of $29.46 in the previous session. The company yesterday became the latest to join the meme stock craze, after it was mentioned on Reddit's Wallstreetbets forum. Separately, it announced the refinancing transaction of $900 million of new fixed rate senior secured notes earlier today.
At least one analyst seemed put off by the profit-taking, with Stifel downgrading the equity to "hold" from "buy" on valuation concerns. The brokerage bunch was optimistic towards Wendy's stock coming into today, with 10 of the 17 analysts in coverage calling the security a "strong buy," while the remaining seven gave it a lukewarm "hold" rating.
Yesterday's pop marked the equity's biggest single-day Jump since March 2020. Despite today's pullback, Wendy's stock is still well above its 40-day moving average, which has been a long-term mode of support since April. Quarter-to-date, WEN has added roughly 45%.
Drilling down to today's options activity, 61,000 calls and 32,000 puts have crossed the tape so far, which is 10 times what is typically seen at this point. Most popular is the June 28 call, followed by the 25 put in the same monthly series, with new positions currently being opened at both.