Wingstop shares soar, but analyst worries about soaring wing prices, up over 30% in a month.
Wingstop shares soar, but analyst worries about soaring wing prices, up over 30% in a month.
The Ups and Downs of Wingstop: Rising Wing Prices Pose Challenges for the Popular Chain

In the world of fast food, Wingstop has been flying high. With its delicious wings and flavorful sauces, the chain has seen a remarkable 20% climb in its stock price this year. This surge has outpaced competitors such as McDonald’s, Cheesecake Factory, and Domino’s Pizza. However, recent developments in the chicken wing market have led to concerns about the future trajectory of Wingstop’s shares, according to analyst Nick Setyan.
One of the primary factors impacting Wingstop’s shares is the gradual increase in wing prices, which have risen by more than 30% in the past month alone. Setyan suggests that during periods of wing cost inflation, Wingstop’s share price tends to stagnate or decline. This trend has already manifested itself, with the company experiencing an 8% drop in its shares, the largest decline since May 2022.
Analysts have set an average price target of $204 for Wingstop. However, Setyan has downgraded the chain from “outperform” to “neutral” and has reduced his price target to $185. Despite this downgrade, Wingstop still holds six buy ratings, 15 holds, and two sells, according to data compiled by Bloomberg.
While wing prices are still favorable compared to historical levels, Setyan warns that they are high enough to put estimates for the second half of 2023 and 2024 cost of goods sold at risk. The situation may worsen if Wingstop continues to enjoy strong sales momentum from the football season through March Madness basketball. As a result, Setyan anticipates a potential negative impact on the company’s earnings due to the elevated wing costs.
High wing costs not only affect the company’s bottom line but also have a knock-on effect on sales. Franchisees often raise prices in response to increased wing costs, leading to a decline in transaction growth. Wingstop’s strategy of increasing the mix of boneless chicken wings may help mitigate some of these challenges. However, Setyan believes that bone-in wings will continue to dictate franchisee pricing decisions in the foreseeable future.
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Despite the concerns surrounding wing prices and their potential impact on Wingstop, Setyan does not foresee any significant risks to the company’s domestic franchised same-store sales growth estimates for the second and third quarters. This provides some reassurance in light of the upcoming second-quarter earnings report, scheduled for August 2.
The world of fast food is constantly evolving, with external factors, such as wing prices, influencing the performance of beloved chains like Wingstop. While rising wing prices pose challenges, the popularity of Wingstop’s delectable wings and the company’s ability to navigate market fluctuations will ultimately determine its success. Investors and wing enthusiasts alike will eagerly await Wingstop’s upcoming earnings report to gauge how the company is faring in this dynamic landscape.
With assistance from Katrina Compoli.