Jack in the Box downgraded to Hold from Buy at Stifel

Stifel analyst Chris O’Cull downgraded Jack in the Box (JACK) to Hold from Buy with a price target of $20, down from $32. The Trump administration’s aggressive immigration policies are likely to create a “significant sales headwind for an unpredictable period.” Stifel’s review of mobile location data suggests Jack in the Box’s comp momentum has deteriorated in recent weeks, leading it to reduce its Q3 same-restaurant-sales projection to negative 5.5% from negative 4.0%. The firm remains confident the company will find a buyer for Del Taco and execute on the other aspects of its strategic plan, but believes declining sales can quickly lead to margin deleverage and lower EBITDA. This could meaningfully impact Jack in the Box’s efforts to reduce leverage quickly, contends Stifel.