Jack In The Box soars 7% with higher revenues in Q4; Analyst raises PT

<p>Shares of Jack in the Box were up 6.6% in pre-market trading on Thursday, as the fast food chain ended fiscal year 20 (ended Sept. 27) with strong fourth-quarter results.

The company’s fourth-quarter revenue grew 15.4% year-over-year to $ 255 million, beating the analyst consensus estimate of $ 249 million. Same-store sales across the Jack in the Box (JACK) system increased 12.2% in Q4. Same-store sales for company-owned locations increased 9.6%, driven by a 21.9% increase in average check, partially offset by a 12.3% decrease in transactions. Same store franchise sales grew 12.4%.

Adjusted EPS for the burger chain increased 69.5% year-over-year to $ 1.61 thanks to improved restaurant margins. Analysts were expecting adjusted EPS of $ 1.14. Jack in the Box did not issue any guidance for fiscal year 21 due to the uncertainty associated with the pandemic. However, the company indicated that the momentum of the fourth quarter continued into the first quarter of fiscal 21. (See analysis of JACK’s shares on TipRanks)

The company will provide more details on its performance during the conference call scheduled for today (November 19). Meanwhile, the company announced a quarterly dividend of $ 0.40 payable on December 18 to shareholders of record at the close of business on December 2. The company had announced in August that it had reinstated its quarterly dividend following its suspension earlier this year due to the pandemic. JACK has a 1.84% dividend yield.

In reaction to the Q4 performance, Oppenheimer analyst Brian Bittner reiterated a Buy rating and raised the price target to $ 110 from $ 100. In a research note to investors, Bittner stated: “According to our preview, JACK delivered strong 4Q20 results with double digit SSS. [Same Store Sales] and ~ 20% EBITDA. Importantly, the sales momentum appears to have continued in 1Q21 and our analysis suggests that significant updates are required to the consensus SSS forecasts. “

“Despite maintaining conservatism in our financial model, we significantly increased our ’21 / ’22 EBITDA estimates. This dynamic clearly supports the appeal of JACK’s deeply discounted valuation, particularly with the new management’s plans to accelerate the unit’s expansion and the potential to restart large stock buybacks, ”Bittner added.

The shares are up 10.7% so far this year. The average price target stands at $ 97.38 and indicates a potential upside of 12.5%. The Street is cautiously bullish on Jack in the Box, with 4 buys and 4 reservations adding a moderate buying analyst consensus.

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