UPDATE: Wunderlich Initiates Coverage on Jack in the Box on Attractive Risk/Reward Scenario

In a report published Friday, Wunderlich Securities analyst Robert M. Derrington initiated coverage on

with a Buy rating and $46.00 price target. In the report, Wunderlich Securities noted, “We are initiating coverage of Jack in the Box Inc. (JACK) with a Buy rating and 12-18 month price target of $46. Our thesis for JACK is centered on our confidence in management's plan to revitalize and differentiate its Jack in the Box (JIB) restaurant system; build its same store sales (SSS), average unit sales, and operating returns; convert its JIB system to a more traditional high return/lower risk franchise model; reposition and improve the returns at its popular Qdoba Mexican Grill; and recycle its growing cash flow to better return objectives including share repurchase activity. We believe JACK presents an attractive risk/reward scenario with 18% potential appreciation over the next 12-18 months to our price target of $46.” Jack in the Box closed on Thursday at $38.89.