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JACK Has Been Soaring since Its 1Q16 Results

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Stock performance

Since the announcement of its 1Q16 results on May 11, 2016, the share price of Jack in the Box (JACK) has risen by over 30%. The better-than-expected results and focus on providing higher quality by JACK has prompted analysts to raise their earnings estimates for the next four quarters. This has increased investor confidence, thus increasing the share price.

On May 11, 2016, JACK announced its results after the market closed. The better-than-expected results pushed the share price of JACK up by 15.2%, from $65.1 to $75.

Continuing its momentum, JACK’s share price was trading at $87.7 on June 23, 2016, which represents a growth of 34.6% from $65.1. However, the current share price is still 12% away from its 52-week high of $98.3, which it achieved in August 2015.

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Peer comparisons

During the same period from May 11, 2016, to June 21, 2016, peers Wendy’s (WEN), McDonald’s (MCD), and Restaurant Brands International (QSR) have returned -3%, -6.1%, and 4.3%, respectively.

By comparison, the share price of the broader comparative index, the Consumer Discretionary Select Sector SPDR Fund (XLY) has increased by 0.3%. XLY has over 10% of its holdings in restaurants and travel companies.

Series overview

In this series, we’ll discuss analysts’ revised estimates for JACK’s revenue, same-store sales growth, EBIT (earnings before interest and tax) margins, earnings per share, and valuation multiple. Finally, we’ll look at what analysts are recommending as well as their target prices over the next 12 months.

Let’s start by discussing JACK’s revised same-store sales growth estimates for the next four quarters.

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