By Sam Boughedda
A Wedbush analyst maintained an Outperform rating and raised the price target of Jack in the Box Inc (NASDAQ:) shares to $115 from $95 per share in a note on Monday.
He also added the stock, which has climbed over 4% during today’s session, to the firm’s Best Ideas list.
“Prior to the recent rise of fears around CA AB257, we believed JACK’s valuation discounted an overly pessimistic view of management’s ability to 1) successfully integrate the Del Taco acquisition, 2) to achieve unit growth acceleration, and 3) to achieve sustained SSS growth over the longer-term across both brands,” said the analyst.
The AB257 bill, or the FAST Recovery Act, was approved by California’s state Senate in August and signed this month by Governor Gavin Newsom. It aims to improve conditions for fast-food workers in the state.
“Post the AB257 impact on shares (down 11% vs. JACK’s 8/25 closing price of $91.84), we find JACK’s valuation even more attractive. We believe the risk of any impact from AB257 prior to FY25 is low. Therefore, we add JACK to the Wedbush Best Ideas List,” concluded the analyst.
