11:52 AM EDT, 08/11/2025 (MT Newswires) -- Wendy's (WEN) is taking a cautious view on H2 with its guidance cut after reporting Q2 results that beat market expectations on the bottom line, Morgan Stanley said in a Friday report.

"Taking an axe to FY guide reflects ongoing sluggishness," the report said. "It's a quite cautious view of the 2H given the bottom line in 2Q was actually better."

The report said its guidance would imply things don't change much as July performance looked slower than Q2. It also warned that some of the pressures on the space are structural, or at least longer duration than the next couple of quarters.

"As before, there isn't much absolute downside to our PT, but numbers come down here, and there may still be risk to that into next year," the note said.

Morgan Stanley cut its price target to $10 from $11 while keeping its underweight rating, saying that the stock is relatively more challenged within the peer group.

Shares of the company were up more than 2% in recent trading.

Price: 10.33, Change: +0.23, Percent Change: +2.33