UPDATE: Oppenheimer Upgrades Jack in the Box to Outperform; Earnings Trajectory Outpaces Expectations.

Oppenheimer raises its rating on Jack in the Box

and establishes a $32 price target per share. Oppenheimer notes, "We upgrade JACK to Outperform and install a $32 price target based on our sum-of-the-parts analysis. We believe the Street under-appreciates improving store-level economics at both brands which could enable JACK's earnings trajectory to outpace expectations. JIB (85% of profits) continues to turn around owing to structural enhancements, and Qdoba (15% of profits) appears on the right path to enhance unit returns and lift investor confidence. Qdoba expectations are relatively constrained and could be a source of upside if core margin improvement continues, accretive franchisee acquisitions occur or new unit profits benefit from expansion into healthier newly acquired markets that remain underpenetrated." JACK closed at $25.36 on Tuesday.