Barclays Downgrades Jack In The Box to Equal-Weight, PT to $19.

Barclays Downgrades Jack In The Box to Equal-Weight, PT to $19.

Barclays has downgraded Jack In The Box (JACK) to an Equal-Weight rating from Overweight, with a price target of $19. The move comes after the company reported quarterly earnings of $1.15 per share, missing the Zacks Consensus Estimate of $1.16 per share [2]. This represents a 12.07% earnings surprise, with revenues of $332.98 million falling short of the Zacks Consensus Estimate by 2.17% [2].

The downgrade reflects Barclays' concern over the company's underperformance in recent quarters. Over the past four quarters, Jack In The Box has missed consensus EPS estimates three times and failed to beat consensus revenue estimates [2]. Additionally, the company's shares have lost about 53.2% since the beginning of the year, compared to the S&P 500's gain of 7.1% [2].

Barclays' decision to lower its rating is also influenced by the company's debt situation. The investment bank notes that Jack In The Box's debt-to-EBITDA ratio remains high, indicating a significant financial burden [1]. The company's turnaround plan, while promising, is still unproven, which adds to the uncertainty surrounding the stock [1].

Looking ahead, investors should keep an eye on Jack In The Box's earnings outlook and the industry's overall performance. The company's earnings estimates for the coming quarters and the current fiscal year have been revised downward, and the industry as a whole is currently in the bottom 32% of Zacks-ranked industries [2]. Restaurant Brands International Inc. (QSR), another operator in the industry, is expected to report earnings on August 7 [2].

References:
[1] https://seekingalpha.com/news/4480436-jack-in-the-box-gaap-eps-of-1_15-in-line-revenue-of-332_98m-misses-by-7_23m
[2] https://www.nasdaq.com/articles/jack-box-jack-q3-earnings-and-revenues-miss-estimates