09:05 AM EST, 03/07/2025 (MT Newswires) -- Wendy's (WEN) growth guidance through 2028 appears to be "unnecessarily aggressive" given the fast food chain's currently depressed valuation, Wedbush Securities said in a Friday client note.

The company on Thursday said it expects systemwide sales to rise between 5% and 6% annually over the long term and reach between $17.5 billion and $18 billion in 2028. It also projects net restaurant units to increase by 3% to 4% annually and reach between 8,100 and 8,300 by 2028.

Wendy's reiterated its full-year 2025 global systemwide sales growth outlook of 2% to 3%, which Wedbush expects to be driven by positive check and transaction gains. The current consensus on FactSet is for a same-store sales increase of 1.5%.

"I'm excited about our upcoming innovation and collaborations that will build on our high-quality menu with fresh ingredients as we continue to elevate our customer focus," Wendy's Chief Executive Kirk Tanner said Thursday. The company is investing in building new restaurants around the world and using technology to "increase restaurant profitability," according to Chief Financial Officer Ken Cook.

A more conservative long-term guidance would have been "prudent and palatable" given the company's discount to its own historical valuation and to franchised peers, Wedbush analyst Nick Setyan said. The company's renewed focus on core equities and improving operations such as customer service makes sense, but a lack of incremental emphasis on value could be a risk, the brokerage said.

"We came away incrementally more concerned that quarter-to-quarter comp volatility could become the new norm as management leans into collaborations without effectively addressing value and the continued (if not accelerating) pressure on the lower income customer," Setyan wrote in the note.

Wendy's continues to forecast adjusted earnings before interest, taxes, depreciation and amortization of $550 million to $560 million for the current year and is targeting annual growth of 7% to 8% for the metric in the long term. Wedbush views the 200-basis-point margin opportunity through productivity upgrades, menu mix management and labor optimization, among other factors, as the "most encouraging goal."

The brokerage maintained its neutral rating on Wendy's stock and reiterated the 12-month price target of $16.