JACK

Jack In The Box Inc

Consumer


Presented:04/19/2016
Price:$68.20
Cap:$2.45B
Current Price:$46.29
Cap:$0.89B

Presented

Date04/19/2016
Price$68.20
Market Cap$2.45B
Ent Value$3.37B
P/E Ratio23.85x
Book ValueN/A
Div Yield0.02%
Shares O/S35.95M
Ave Daily Vol1,029,446
Short Int9.20%

Current

Price$46.29
Market Cap$0.89B
Jack in the Box, Inc. operates and franchises a chain of quick-service and fast-casual restaurants. It operates through the Jack in the Box and Qdoba Mexican Grill segments. The Jack in the Box segment operates quick-service restaurants that offer a selection of products targeted at the adult fast-food consumer, including hamburgers, tacos, specialty sandwiches, drinks, real ice cream shakes, salads, and side items. The Qdoba Mexican Grill segment operates fast-casual restaurants that feature custom orders as well as a variety of catering options. The company was founded by Robert Oscar Peterson in 1951 and is headquartered in San Diego, CA.

Publicly traded companies mentioned herein: Chipotle Mexican Grill, Inc (CMG), Domino’s Pizza, Inc (DPZ), Jack in the Box Inc (JACK), McDonald’s Corporation (MCD), Restaurant Brands International Inc (QSR), The Wendy’s Company (WEN), Yum! Brands, Inc (YUM)

Highlights

Shares of Jack in the Box (JACK) have been trading in the $65 - $70 range since February (2016), and the stock is presently about 30% below its 52-week high due to comps decelerating and competition. Despite McDonald's All-Day Breakfast (ADB) taking some share and Wendy’s and QSR concurrently ramping up marketing efforts, he sees the potential for JACK’s comps to accelerate based on value offerings and ramping marketing over the remainder of the year. He is long at this time and sees 30% - 40% upside based on: multiple expansion (i.e., from 9.5x to 12x EBITDA, and from ~15x to 20x FCF/ share), a reduction of capital intensity, capacity to take on leverage, and a potential spin-off of Qdoba.

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