JACK: Turnaround Efforts Will Navigate Weaker Sales Toward Modest 2026 Recovery

The analyst price target for Jack in the Box has been reduced by approximately $0.43 per share to about $19.89, as analysts factor in weaker near term same store sales, margin pressures despite modestly better profit margins, and updated 2026 guidance for the standalone business following the Del Taco sale.

Analyst Commentary

Analysts remain divided on Jack in the Box following the Q4 earnings release and the announced sale of Del Taco. Recent price target revisions reflect a more cautious stance on near term fundamentals while still acknowledging potential longer term upside from restructuring and 2026 guidance.

Bullish Takeaways

• Bullish analysts highlight that the 2026 standalone EBITDA outlook of $225M to $240M is broadly in line with prior expectations. This supports the view that the core brand can sustain a solid profit base after the Del Taco divestiture.
• Some see the Del Taco sale and Jack on Track plan as simplifying the story and improving strategic focus. This could enhance capital allocation, margin visibility, and ultimately valuation once execution risk is reduced.
• The expectation for sequential same store sales improvement into the second half of 2026 underpins the argument that current estimates may already discount a difficult 2025. This leaves room for multiple expansion if trends stabilize.
• Despite lowered price targets, Outperform oriented research still frames shares as offering upside for investors who are willing to look through near term volatility and focus on operational recovery and cost discipline.

Bearish Takeaways

• Bearish analysts emphasize that most price targets have been cut into the mid teens. This reflects diminished confidence in the near term earnings power of the business and a less favorable risk reward profile.
• Recent results, including a Q4 EPS miss, underscore ongoing traffic softness and negative leverage on margins from weak comps, beef inflation, and higher labor costs in key markets, which is pressuring valuation multiples.
• There is skepticism that the Jack on Track turnaround can fully offset a tough quick service industry backdrop. Some models assume negative 2026 same store sales at the low end of management guidance that is viewed as ambitious.
• Guidance for 2025 and 2026 is seen by cautious research as marking a rebuilding period rather than a clear inflection. This leaves the equity story characterized by execution risk, limited growth visibility, and potential for further estimate revisions.

What's in the News

• Jack in the Box outlined 2026 guidance calling for same store sales between -1% and +1% versus fiscal 2025, reinforcing expectations for a modest recovery trajectory rather than robust growth (Corporate guidance).
• The company plans to maintain its restaurant count at 2,050 to 2,100 locations in 2026, with about 20 openings offset by 50 to 100 closures, primarily among franchise restaurants. This signals a focus on portfolio optimization over aggressive expansion (Business expansions and discontinued operations).
• Jack in the Box entered a cooperation agreement with activist investor GreenWood Investors, adding two independent directors and forming a Capital Allocation Committee, which may influence capital returns and strategic priorities (Investor activism).
• The company completed a $75 million share repurchase program, retiring more than 1.2 million shares, or roughly 6.24% of shares outstanding, under its buyback authorization announced in late 2023 (Buyback tranche update).
• Jack in the Box was removed from multiple S&P indices, including the S&P Composite 1500 and S&P 600, a change that can reduce passive fund ownership and add pressure to trading liquidity (Index constituent drops).

Valuation Changes

• The Fair Value Estimate has decreased slightly from approximately $20.32 to about $19.89 per share, reflecting a modest reduction in intrinsic value assumptions.
• The Discount Rate is unchanged at 12.5%, indicating no revision to the perceived risk profile or required return for the equity.
• The Revenue Growth outlook has weakened, with the modeled rate declining from about -5.96% to roughly -7.61%, implying a more conservative view on top line performance.
• Net Profit Margin expectations have improved modestly, rising from around 7.29% to approximately 7.46%, suggesting slightly better operating efficiency assumptions.
• The future P/E multiple has edged up marginally from about 6.19x to roughly 6.24x, signaling a small increase in the valuation multiple applied to forward earnings.