Shares close lower
Jack in the Box (JACK) reported its earnings on May 13, 2015, after the market closed. The next day, shares began trading at $92.79, up 1% from the previous day’s close of $91.80. The day’s high and low were $93.24 and $86.41, respectively.
Share volume was ~2.5 million shares compared to the 90-day average daily volume of ~0.6 million shares. Jack in the Box closed 4.3% down at $87.82 from the previous day’s close, according to NASDAQ.
Investors seem spooked by lower same-store sales growth at the company’s fast-growing concept Qdoba. In 2Q15, same-store sales came in at 8.3%, compared to 14% in 1Q15. Given the muted unit growth strategy, investors are watching the same-store sales movement closely.
Upgrades and downgrades
On May 14, 2015, Morgan Stanley maintained its “neutral” rating for Jack in the Box with a price target of $93. This was unchanged from its previous target.
Jefferies also maintained its previous “buy” recommendation with a price target of $107.
As of April 14, seven Wall Street analysts had a “buy” rating, eight had a “hold” rating, and none had a “sell” rating for Jack in the Box. The consensus target price was $102.
Following are Wall Street’s consensus estimates for Jack in the Box in 3Q15:
- Adjusted earnings per share estimates are $0.72.
- Revenue estimates are $356 million.
- Estimates for operating profits are $50 million, which would give an operating margin of 14%.
- Adjusted net income estimates are $28 million.
- 3Q15 earnings will likely be announced on August 5, 2015.
Yum! Brands (YUM), which operates Pizza Hut, saw its stock increase by 3%. Chipotle Mexican Grill (CMG), which reported its earnings on April 21, saw its share price decline by 6%. YUM and CMG make up 1.5% and 1% of the Consumer Discretionary Select Sector SPDR Fund (XLY), respectively. XLY also has a 3% portfolio interest in Starbucks (SBUX).