Jack In The Box (JACK) PT Lowered to $112 at UBS on Inflationary Pressures

August 5, 2021 7:57 AM EDT
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Price: $101.99 +1.36%

Rating Summary:
    17 Buy, 10 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 16 | Down: 13 | New: 52
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UBS analyst Dennis Geiger lowered the price target on Jack In The Box (NASDAQ: JACK) to $112.00 (from $124.00) after SSS and EPS topped expectations but also expecting inflationary pressures to limit near term earnings upside.

The analyst reiterated a Neutral rating, stating "JACK's F3Q comp and EPS outperformed Consensus and most investor expectations we heard, but cost guidance disappointed. We were encouraged by the increased visibility into next yr's investment levels as JACK shared FY22 capex and other investments of $65-75MM relative to Consensus' $56MM and investor expectations that we heard which were higher. But investors seem more focused on: 1) JACK's expectations for 4-5% commodity inflation (vs. 1-3% previously) or ~9% in F4Q, and 7-8% labor inflation (vs. 5-6%, previously) or ~11% in F4Q; and 2) the withdrawal of FY21 sss and EBITDA targets, consistent w/ JACK's new guidance framework. Focus from here is on the trajectory of comp trends, the magnitude of FY22 inflation, G&A in 2022 and unit development agreement news."

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