Wendy's stock price fell 3.03% to $18.87 a share after a downgrade to neutral from buy by Northcoast analyst Jim Sanderson.
Wendy's has done a good job navigating the Covid-19 crisis, which has slammed the restaurant industry, with comparable sales starting to return to levels last seen before the deadly virus hit, Sanderson wrote in his research note.
But the Northcoast analyst wrote that he is worried that disruptions in the beef supply chain could drag down Wendy's performance over the near-term.
In particular, Wendy's central sales pitch, that it only uses fresh beef, could prove harder to maintain with fresh supplies becoming harder to obtain as the coronavirus ravages the cattle and meat processing sectors.
The shortage of fresh beef, in turn, could drag on for anywhere from weeks to months, Northcoast's Sanderson warned.
Wendy's is slated to report its first-quarter earnings on Wednesday before the stock market opens.
Analysts surveyed by Zacks Investment Research have pegged Wendy's earnings per share for the first quarter of 2020 at 10 cents, for a decline over the same period last year of 28.6%.
Wendy's first-quarter revenue is estimated to ring in at $412.02 million, edging up 0.08% over the first three months of 2019.
The average of analyst estimates for Wendy's earnings per share have dropped 79.2% over the last month, according to Zacks.