Wingstop (WING) faces top-line pressures, including its consumers' sensitivity to rising gas prices, but the path to positive same-store sales growth in the second half remains intact, supported by increased value offerings, faster service, marketing efforts, and its loyalty program, RBC Capital Markets said in a note emailed Friday.
The company is scheduled to report its Q2 results on July 29.
The stock is trading near trough valuation and any directional improvements in same-store sales growth could lead to a rerating in the multiple, according to the note.
The brokerage models Q2 same-store sales declining 5.9%, citing sensitivity to gas price volatility, versus the Street's estimate of a 5.2% decline and the company's guidance of a mid-single digit decline, the note added.
RBC believes management will not lower its full-year 2026 same-store sales growth estimate from its current guidance for a low-single-digit decline, despite ongoing macro volatility and gas prices on the rise, the brokerage said.
RBC kept an outperform rating on Wingstop with a price target of $225.
Price: 142.75, Change: +1.82, Percent Change: +1.29
