Cracker Barrel: Hold Rating Amid Balanced Risk-Reward and Cautious Optimism

Benchmark Co. analyst Todd Brooks has maintained their neutral stance on CBRL stock, giving a Hold rating on June 3.

Todd Brooks has given his Hold rating due to a combination of factors impacting Cracker Barrel’s current financial performance and future outlook. The company’s recent quarterly results showed better-than-expected earnings and EBITDA, driven by effective cost management in labor and general and administrative expenses. However, despite these positive results, the stock’s significant price increase since the last quarter has led to a balanced risk-reward scenario at current trading levels.
Management’s updated guidance reflects cautious optimism, with an increase in EBITDA expectations but maintained revenue projections. While there are improvements in labor efficiency and sales trends, the ongoing investment phase for the brand suggests that substantial growth may not be immediate. These elements contribute to the decision to maintain a Hold rating, as the stock appears to be fairly valued given the current market conditions and future uncertainties.

Brooks covers the Consumer Cyclical sector, focusing on stocks such as Cracker Barrel, El Pollo LoCo, and Papa John’s International. According to TipRanks, Brooks has an average return of -3.0% and a 38.83% success rate on recommended stocks.

In another report released on June 3, UBS also maintained a Hold rating on the stock with a $60.00 price target.