Cracker Barrel (CBRL) PT Lowered to $88 at Citi, 'we continue to view the NTM risk/reward as unfavorable'

Citi analyst Jon Tower lowered the price target on Cracker Barrel (NASDAQ: CBRL) to $88.00 (from $92.00) while maintaining a Sell rating.

The analyst comments "We see risk to Street F3Q23/FY23 estimates heading into CBRL’s earnings on the back of persistent soft traffic trends. Easing commodity costs and ongoing cost savings measures (gross $25M budgeted for FY23) should act as a buffer to margins for the balance of FY23, but we worry lower input prices may spur competitors to increase promotional activity going forward. Further, underlying deterioration in dining room AWS (down ~8% vs. pre-COVID) suggests the top-line guidance may carry greater risk than prior, and a slowdown here may accelerate retail markdowns (a risk to margins). With this uncertainty, we continue to view the NTM risk/reward as unfavorable at current levels."

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