Loop Capital's analyst, Alton Stump, has revised the price target for Jack in the Box (JACK, Financial) from $65 to $61, while maintaining a Buy rating on the stock. The adjustment comes after the company reported mixed results for the second quarter. Although earnings per share exceeded expectations, the company’s comparable sales were notably lower, aligning with earlier announcements. These factors influenced the analyst's decision to adjust the forecast for JACK. Investors are advised to consider these developments in the context of their investment strategies.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Jack In The Box Inc (JACK, Financial) is $35.72 with a high estimate of $65.00 and a low estimate of $23.00. The average target implies an upside of 39.16% from the current price of $25.67. More detailed estimate data can be found on the Jack In The Box Inc (JACK) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Jack In The Box Inc's (JACK, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Jack In The Box Inc (JACK, Financial) in one year is $82.95, suggesting a upside of 223.14% from the current price of $25.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Jack In The Box Inc (JACK) Summary page.
JACK Key Business Developments
Release Date: May 14, 2025
- Same Store Sales (Jack brand): Decreased 4.4% overall; franchise restaurants down 4.5%, company-owned down 4%.
- Restaurant Openings and Closures (Jack brand): 5 openings and 12 closures in the quarter.
- Restaurant Level Margin (Jack brand): Decreased to 19.6% from 23.6% a year ago.
- Food and Packaging Costs (Jack brand): 27.8% of sales, a decline of 100 basis points from the prior year.
- Labor Costs (Jack brand): 33.8% of sales, increased 320 basis points from the prior year.
- Franchise Level Margin (Jack brand): $68.3 million or 40% of franchise revenues, down from $71.7 million or 40.4% a year ago.
- Same Store Sales (Del Taco): Declined 3.6%; franchise sales down 4.2%, company-owned down 1.7%.
- Restaurant Level Margin (Del Taco): 12.8%, down 400 basis points from the prior year.
- Franchise Level Margin (Del Taco): 24.4% of franchise revenues, down from 28.9% last year.
- Restaurant Count (Del Taco): 591 with 6 openings and 4 closures during the quarter.
- SG&A Expenses: $35.5 million or 10.5% of revenues, down from $37.5 million or 10.3% a year ago.
- Consolidated Adjusted EBITDA: $66.5 million, down from $75.7 million in the prior year.
- GAAP Diluted Loss Per Share: $7.47 due to non-cash goodwill and intangible asset impairment.
- Operating Earnings Per Share: $1.20, down from $1.46 in the prior year.
- Capital Expenditures: $21.5 million for the quarter.
- Total Debt Outstanding: $1.7 billion with a net debt to adjusted EBITDA leverage ratio of 5.5 times.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Jack In The Box Inc (JACK, Financial) is focusing on becoming a simpler, asset-light company to drive sustainable long-term growth.
- Digital sales have increased to 18% system-wide, with continued investment in technology and digital initiatives.
- The rollout of new point-of-sale systems and kiosks is progressing, with nearly 1,500 restaurants equipped.
- The company is committed to strengthening its balance sheet, accelerating cash flow, and paying down debt.
- Jack In The Box Inc (JACK) plans to open between 35 to 40 new restaurants in fiscal 2025, including in new markets like Chicago.
Negative Points
- Same-store sales decreased by 4.4% for the Jack brand, with both franchise and company-owned locations experiencing declines.
- Restaurant level margins decreased due to lower sales, inflation in commodities, wages, and utilities, and higher operating costs.
- The company recorded a significant non-cash goodwill and intangible asset impairment charge of $203.2 million for Del Taco.
- Jack In The Box Inc (JACK) has discontinued its dividend and did not repurchase any shares during the quarter.
- The company is facing challenges with integrating new technology with existing legacy systems, impacting sales temporarily.
