On Wednesday, Piper Sandler adjusted its outlook on Jack in the Box (NASDAQ:JACK) shares, decreasing the price target to $67 from the prior target of $81, while maintaining a Neutral rating on the stock.
The adjustment comes as the firm revises its financial model for the fast-food chain in anticipation of its second-quarter fiscal year 2024 earnings, set to be released next week.
The revision was influenced by recent industry traffic trendsa observed during the current earnings season. Piper Sandler has also made changes to its franchise margin assumptions for the Jack in the Box brand. These updates have led to a reduction in the projected adjusted earnings per share (EPS) for the fiscal years 2024 to 2026.
The firm's updated price target of $67 reflects a downward revision from the previous $81 target. This new target is a result of the aforementioned adjustments in the company's earnings model. The ongoing assessment of the industry and Jack in the Box's financial health prompted these changes.
In the statement, Piper Sandler emphasized the importance of adapting their model to align with the latest industry data and the company's financial prospects. The firm's reiteration of the Neutral rating indicates their current stance on Jack in the Box's stock remains unchanged despite the modifications to the price target.
InvestingPro Insights
As Piper Sandler adjusts its price target for Jack in the Box (NASDAQ:JACK), investors may find additional context in the real-time data and insights provided by InvestingPro. With a market capitalization of $1.07 billion and a P/E ratio that stands at 9.57, Jack in the Box appears to be valued by the market at a level that may intrigue value-oriented investors. Notably, the adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 9.31, hinting at a modest improvement in earnings relative to the stock price.
InvestingPro Tips highlight that management has been actively repurchasing shares, which often signals confidence in the company's value proposition. Moreover, the stock's high shareholder yield and consistent dividend payments for 11 consecutive years, with a current dividend yield of 3.2%, could be attractive to income-focused investors. However, it's important to note that the stock has experienced significant price declines over the last three months, trading near its 52-week low, which may suggest a potential buying opportunity for those who believe in the company's fundamentals.
For those considering an investment in Jack in the Box, InvestingPro offers additional insights. There are 9 more InvestingPro Tips available, which could provide further depth into the company's financial health and stock performance. Interested readers might want to explore these tips to gain a more nuanced understanding of the investment opportunity. For access to these valuable insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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