Jack In The Box stock rating reiterated at Equalweight by Morgan Stanley

Investing.com - Morgan Stanley (NYSE:MS) has reiterated its Equalweight rating and $23.00 price target on Jack In The Box (NASDAQ:JACK), citing limited confidence in a near-term turnaround for the fast-food chain. According to InvestingPro analysis, JACK is currently undervalued, with a comprehensive Fair Value assessment available in the Pro Research Report.

The investment firm noted that while the third fiscal quarter might represent a bottom for the company, it remains cautious given previous commentary about early Q3 trends mirroring Q2 performance followed by subsequent weakness. The company’s revenue growth has remained relatively flat at 0.1% year-over-year, as shown in recent InvestingPro data.

Morgan Stanley highlighted ongoing pressure on Jack In The Box’s core low-income customer base and the chain’s lack of attractively priced entry-level menu items as continuing challenges, issues that have also affected competitors in the quick-service restaurant sector. InvestingPro analysts note that the company maintains a solid operating margin of 16%, suggesting some resilience despite these headwinds.

The company is reportedly working with a third party to review its menu structure, pricing architecture, and value options while also implementing "Jack’s Way," a new strategy focused on improving guest experience, service, and operations.

Despite these initiatives, Morgan Stanley expects near-term headwinds to persist, suggesting that any benefits from the company’s improvement strategies would likely not materialize until late 2026 or early 2027.

In other recent news, Jack In The Box reported its fiscal third-quarter 2025 earnings, which fell short of analyst expectations. The company posted earnings per share of $1.02, missing the forecasted $1.17, and reported revenue of $332.99 million, below the anticipated $340.68 million. Same-store sales for the core Jack in the Box brand declined by 7.1%, while Del Taco’s same-store sales decreased by 2.6%. In response to these results, Piper Sandler lowered its price target for Jack In The Box from $26.00 to $19.00, maintaining a Neutral rating. Goldman Sachs also reiterated its Sell rating with an $18.00 price target, citing the earnings miss as a primary concern. These developments highlight the challenges the company faces in meeting market expectations. Investors are closely monitoring the company’s performance amid these recent updates.

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