Cracker Barrel (CBRL) PT Lowered to $42 at BofA Securities

BofA Securities analyst Sara Senatore lowered the price target on Cracker Barrel (NASDAQ: CBRL) to $42.00 (from $48.00) while maintaining a Underperform rating.

The analyst comments "CBRL is intently focused on managing both operating expenses (the 4Q EBITDA beat was driven by G&A just as it was in 3Q) and capital expenditures (F26E range of $135- $150mm vs pre-release consensus of $194 mm, 3-yr total spend well below previous outlook of $600-700mm). But the sharply reduced EBITDA outlooks for both F26 ($150- $190mm vs $240mm VA Cons) and implied F27 (CBRL pulled previous guidance of $375-425mm), signal lower returns ahead. We lower our F1Q26 EBITDA estimate to $27.2mm from $48.2mm as we incorporate lower SSSG (-3.0% vs +1.9% prior), consistent with ~5% price and the current traffic run rate of -8%. Our F26 EBITDA estimate ($164.0mm vs $232.5mm) also comes down, as does our EPS estimate ($0.46 vs $3.47). Relative to the equal-weighted S&P 500, CBRL is trading at 0.5x EV/EBITDA, below its 5 and 10-yr averages of 0.6x/0.7x respectively (our previous P/E based methodology is not meaningful on the current depressed EPS). We apply a 0.5x relative multiple, or 7.1x absolute to our forward EBITDA estimate (F27: $197.7mm), to arrive at a PO of $42 (vs $48 prior). Reiterate Underperform given persistent traffic headwinds and competitive pressure."

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