NEW YORK (TheStreet) -- The Wendy's Co. (WEN) - Get Report  stock is higher by 4.04% to $10.30 on Thursday morning after Goldman Sachs earlier lifted its ratings on the fast food chain restaurant to "neutral" from "buy" and added it to its 'Conviction Buy' list. 

The firm also raised its price target to $12.50 from $12. 

"Valuation is compelling," analysts said.

Even though rival McDonald's (MCD) recently rolled out its plan to sell breakfast foods at all hours, Wendy's lacks any exposure to this competition, the firm noted.

Analysts also applauded Wendy's "4 for $4" platform, which is the company's latest offering, featuring a Jr. Bacon Cheeseburger, four chicken nuggets, small fries and a drink, for $4. 

From this launch, the company has already seen improving traffic trends.

However, some risks include lower-than-expected re-franchising proceeds and below-consensus comps, analysts added. 

Separately, TheStreet Ratings team rates WENDY'S CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate WENDY'S CO (WEN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 37.26% is the gross profit margin for WENDY'S CO which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WEN's net profit margin of 1.63% significantly trails the industry average.
  • WENDY'S CO's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WENDY'S CO increased its bottom line by earning $0.31 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus $0.31).
  • WEN, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, WENDY'S CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: WEN