Oppenheimer Remains Bullish on Jack in the Box (JACK) Following 4Q
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Oppenheimer reiterated an Outperform rating and $115.00 price target on Jack In The Box (NASDAQ: JACK) following the company's 4Q earnings report. Adjusted 4Q16 EPS of $1.03 beat Street's $0.88E primarily related to better SG&A (~$0.11), a lower tax rate ($0.03) and higher franchise profits ($0.02). Within management's $4.55-4.75 EPS guidance, the company assumes 20-21% restaurant margins (vs. Street's 21%), SG&A at 11-11.5% of revenue (vs. 11.7%) and $408M in share buybacks (vs. $440M).
Analyst Brian Bittner commented, "Based on what we learned in JACK's earnings release, we would buy any nearterm dip. As we work through the model, management's initial '17 EPS outlook appears "conservatively" set (at $4.55-4.75 vs. Street's $4.75E). JITB sales trends have started the year hot, but investors will also want insights from the 11:30 a.m. ET call on how Qdoba's performance could improve (18% of profits). With an attractive valuation, conservative EPS guidance, "solid" sales trends and an improving financial model, we are bullish on the stock. Reiterate $115 price target."
Shares of Jack In The Box closed at $101.65 yesterday.
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