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Investing.com - Piper Sandler lowered its price target on Cracker Barrel (NASDAQ:CBRL) to $49.00 from $56.00 on Thursday, while maintaining a Neutral rating on the restaurant chain’s stock. The stock, currently trading at $48.61 with a market cap of $1.09 billion, appears undervalued according to InvestingPro analysis, despite recent challenges.
The price target reduction follows Cracker Barrel’s quarterly results for the period ended August 1, which showed restaurant same-store sales growth of 5.4%, despite traffic declining by 1%. InvestingPro data reveals the company maintains an overall FAIR financial health score, though its current ratio of 0.65 indicates some liquidity challenges.
The restaurant chain reported that for the first 18 days of its fiscal first quarter 2026, traffic continued to decline at approximately 1%, but following the unveiling of a new logo on August 19 and subsequent media attention, traffic deteriorated further to approximately 8% down.
Based largely on this traffic step-down, Cracker Barrel provided initial fiscal year 2026 revenue guidance below consensus expectations, incorporating an assumption that traffic would decline between 4% and 7% for the full fiscal year.
The company also issued initial fiscal year 2026 adjusted EBITDA guidance of $150 million to $190 million, which falls significantly below the pre-announcement consensus estimate of approximately $233 million.
In other recent news, Cracker Barrel reported its fourth-quarter earnings for fiscal year 2025, revealing a slight miss in earnings per share (EPS) estimates. The company posted an EPS of $0.74, which was below the forecast of $0.76. However, revenue exceeded expectations, reaching $868 million compared to the anticipated $853.96 million. Despite the revenue beat, the company has revised its future financial outlook. Cracker Barrel reduced its EBITDA outlook for fiscal 2026 to $150-190 million, down from a previous consensus of $240 million, and withdrew its fiscal 2027 guidance. Following this, BofA Securities lowered its price target for Cracker Barrel to $42.00, maintaining an Underperform rating. Truist Securities also adjusted its price target to $58.00 from $62.00, keeping a Buy rating, citing weaker-than-expected guidance for fiscal 2026 despite positive sales and adjusted EBITDA results. These developments highlight the mixed financial outlook for the company.
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