TD Cowen analyst Andrew Charles has maintained their neutral stance on JACK stock, giving a Hold rating on February 21.
Andrew Charles has given his Hold rating due to a combination of factors impacting Jack In The Box. The company is undergoing a leadership transition with the recent resignation of CEO Darin Harris, and the appointment of Lance Tucker as interim CEO. Tucker’s focus is on reducing the company’s leverage, which currently stands at 5.3 times net debt to EBITDA. This involves cutting back on share repurchases and capital expenditures, which indicates a cautious approach to financial management.
Despite a better-than-expected adjusted EBITDA in the first quarter, driven by a one-time benefit from a new beverage contract, the company’s overall performance remains mixed. Jack In The Box’s system-wide comparable sales slightly exceeded expectations, but Del Taco’s sales fell short. Additionally, adverse weather conditions have negatively impacted sales figures. These factors, combined with the company’s strategic focus on deleveraging, contribute to the Hold rating as the outlook remains uncertain.
In another report released on February 21, Wedbush also downgraded the stock to a Hold with a $40.00 price target.