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On Monday, Stifel analysts revised their outlook for Jack in the Box (NASDAQ:JACK) stock, decreasing the price target from $40.00 to $35.00 while keeping a Hold rating on the shares. The stock, currently trading at $29.48, sits near its 52-week low of $29.29, having declined 54.42% over the past year. The firm’s analysis followed a thorough examination of the company’s financial disclosures, specifically the 10-K and 10-Q filings. This review prompted adjustments to their financial models for Jack in the Box. According to InvestingPro analysis, the stock appears undervalued at current levels.
The adjustment was primarily due to the anticipation of continued weak comparable sales trends, as inferred from mobile location data analysis. This aligns with recent performance showing a 6.02% revenue decline in the last twelve months. The company’s fiscal year 2025 earnings per share (EPS) estimate was consequently revised downward, joining 18 other analysts who have recently lowered their earnings expectations. Despite this change in the price target, Stifel’s stance on the stock remains unchanged with a Hold rating. For deeper insights into Jack in the Box’s financial health and growth prospects, InvestingPro subscribers have access to over 30 additional financial metrics and exclusive analysis.
The decision to lower the 12-month target price to $35 reflects Stifel’s updated assessment of Jack in the Box’s future performance. The analysts cited soft comp sales trends as a key factor behind their revised forecast. This move indicates a more cautious view of the fast-food chain’s stock potential over the next year. Despite the challenges, the company maintains a significant 5.97% dividend yield and has consistently paid dividends for 12 consecutive years.
In contrast, the review of Yum Brands’ filings, which was conducted simultaneously, did not lead to any changes in the firm’s estimates for that company. Yum Brands, which operates several well-known fast-food chains, appears to have a more stable outlook according to Stifel’s analysis.
Stifel’s comments were succinct in explaining the rationale behind the revised price target for Jack in the Box: "We reduced our FY25 EPS estimate for JACK, as we believe comp sales trends remain soft based on our review of mobile location data. We lowered our 12-month target price to $35 and maintain our Hold rating." This statement captures the essence of the firm’s updated perspective on Jack in the Box’s stock.
In other recent news, Jack in the Box reported its first-quarter earnings for fiscal year 2025, which exceeded expectations with earnings per share (EPS) of $1.92, surpassing the consensus estimate of $1.69. Despite the positive earnings, the company forecasts potential challenges in the second fiscal quarter due to macroeconomic pressures. During a recent shareholder meeting, Jack in the Box secured strong shareholder support, with over 94% approval for its board members and 80.63% in favor of executive compensation. Jefferies, RBC Capital, and Truist Securities all adjusted their price targets for Jack in the Box, with Jefferies setting it at $41, RBC Capital at $45, and Truist at $51, while maintaining their respective ratings. The announcement of CEO Darin Harris’s resignation has added a layer of uncertainty, but the company benefits from experienced interim leadership. KeyBanc maintained a Sector Weight rating, noting the positive impact of a new beverage contract on margins. Despite the challenges, analysts like RBC Capital and Truist Securities see potential for Jack in the Box to navigate through industry headwinds. The company’s strategic decisions and recent developments remain of interest to investors as they consider the future trajectory of Jack in the Box.
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