Market Overview

Cowen: Jack In The Box Brings The Heat With Tiny Tacos, Spices Up 2020 Guidance

Share:
Cowen: Jack In The Box Brings The Heat With Tiny Tacos, Spices Up 2020 Guidance

First-hand checks at Jack in the Box Inc. (NASDAQ: JACK) stores suggest the recent launch of Tiny Tacos is a game-changer and puts the restaurant chain on track to achieve 2020 guidance, according to Cowen.

The Analyst

Andrew Charles upgraded Jack in the Box from Market Perform to Outperform with a price target lifted from $91 to $102.

The Thesis

Jack in the Box launched in mid-January Tiny Tacos and Cowen's first-hand checks throughout the first three weeks point to a sales lift of at least 5% and up to a low-double-digit, Charles wrote in the note. The momentum could translate to a full-year 2020 same-store sales growth of 1.5% to 2.1% which puts it within reach of management's own guidance of 1.5% to 3% and the Street's current estimate of 2%.

The restaurant chain has developed a reputation for lowering its initial same-store sales guidance each year since 2015, the analyst wrote. As such, management now has an opportunity to reverse this trend and it would "go a long way" to support the stock which is down 16% over the past three years.

Beyond the Tiny Tacos initiative, investors have reason to be concerned with Jack in the Box's longer-term story, the analyst wrote. But the company's late-2019 announcement it is searching for a new CEO is a positive development. A new CEO backed by prior experience in turning around a restaurant could mark a shift from the prior "bundled value" strategy.

Price Action

Shares of Jack in the Box were trading higher by 1.39% at $87.52 at time of publication.

Related Links:

Jack In The Box Discloses Troubling Store Trends

Chipotle's Q4 Has Some Bullish While Others Wanted More

 

Screengrab Of Jackinthebox.com

Latest Ratings for JACK

DateFirmActionFromTo
Apr 2020SunTrust Robinson HumphreyMaintainsBuy
Mar 2020Morgan StanleyMaintainsEqual-Weight
Mar 2020Cowen & Co.DowngradesOutperformMarket Perform

View More Analyst Ratings for JACK
View the Latest Analyst Ratings

 

Related Articles (JACK)

View Comments and Join the Discussion!

Posted-In: Andrew Charles CowenAnalyst Color Upgrades Price Target Restaurants Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
PECFRAMaintains8.0
HUNCFRAUpgrades16.0
CCCFRADowngrades11.0
VOYAPiper SandlerMaintains58.0
PRUPiper SandlerMaintains64.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com