Oppenheimer Remains Bullish Despite Qdoba Headwinds Driving Jack in the Box's (JACK) EPS Miss

Oppenheimer reiterated an Outperform rating and $86.00 price target on Jack In The Box (NASDAQ: JACK) following the company's 1Q results. Adjusted EPS of $0.93 missed Street's $1.03. Unexpected Qdoba costs were a $0.07 headwind versus consensus, accounting for most of the miss. Qdoba comps were +1.5% vs. Street's +1.3%. Guidance for 2Q is flat to +3% (vs. Street's +3%).

Analyst Brian Bittner commented, "We believe JACK trading down 19% in after-hours is an overreaction. While this release had disappointing casualties, the Street's '16E EPS will only move 2% lower. The big issue was JITB comps are -3% in the first four weeks of the current quarter (2Q16), below the Street’s +1.8%. But keep in mind this is: 1) lapping a monster fourweek trend of +10% (so 2-year is OK); and 2) only contains one week of new menu/ media help. On the 11AM call, management needs to focus on giving credibility to improving comps in 2H, and convince investors 1Q16's perfect storm of ugliness was a one-quarter misstep (after a long string of excellence). We will publish another note after the 11:30am earnings call."

For an analyst ratings summary and ratings history on Jack In The Box click here. For more ratings news on Jack In The Box click here.

Shares of Jack In The Box closed at $76.91 yesterday.

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