Stifel Upgrades Jack In The Box to Buy and Raises Price Target

New Leadership, New Strategy

• Stifel analysts have upgraded Jack In The Box Inc (NASDAQ: JACK) from Hold to Buy, citing the appointment of Lance Tucker as CEO as a major positive catalyst.

• The firm has also raised its price target from $32 to $35, crediting a more focused operational and financial strategy.

Key Strategic Initiatives

• Debt Reduction Plan:
  Jack In The Box aims to reduce its debt by over $300 million within the next 12-18 months.

• Real Estate and Asset Sales:
  The company plans to sell its restaurant real estate, eliminate its quarterly dividend, and divest Del Taco to improve its cash position.

• Operational Streamlining:
  Jack In The Box plans to close 150-200 underperforming units to refocus resources on higher-return opportunities.

Financial and Competitive Outlook

• Lower Leverage Expected:
  Stifel anticipates Jack’s financial leverage could drop below 5x by fiscal 2026, which would lower its risk profile significantly.

• Growth Potential:
  Despite recent declines in same-store sales, analysts believe there is substantial upside if the company successfully executes its turnaround strategy.

“We believe the equity value will improve as debt is repaid. The valuation should also benefit from owning a single, highly franchised brand with a focus on improving same-store sales,” stated analysts from Stifel.