Overview
Mizuho on Monday lowered its price target for Jack In The Box to $18 from $20 and held a Neutral rating on the stock. The shares traded at $16.81, reflecting a 56% decline over the past year and a near 19% drop in the last week.
Why Mizuho cut the target
The firm pointed to Jack In The Box’s fiscal first-quarter results and the company’s reiterated guidance for fiscal 2026 as the basis for the reduction. Those results and guidance underscore an absence of same-store sales momentum, limited unit growth visibility and uncertainty around margin recovery at company-owned restaurants.
Mizuho highlighted the company’s guidance for fiscal 2026 company-owned unit-level margins of 17-18%, compared with a 26.2% unit-level margin in fiscal 2019. The firm framed that gap as evidence of sustained margin pressure.
Recent operating and financial performance
Over the last twelve months, revenue fell 0.76%. In its analysis, InvestingPro assigns Jack In The Box a financial health score of "WEAK." The company’s first-quarter fiscal 2026 results showed a 6.7% decline in same-store sales, revenue of $349.5 million that missed the consensus estimate of $374.31 million, and adjusted earnings per share of $1.00 versus the expected $1.15. Systemwide sales fell 7.1% in the quarter, with the company citing a meaningful drop in transactions and mix despite some price increases.
Analyst estimates and revisions
Mizuho trimmed its fiscal 2026 earnings per share estimate to $3.48 from $3.50 and adjusted its fiscal 2027 EPS estimate to $3.71 from $3.74. According to InvestingPro Tips, 13 analysts have lowered their earnings forecasts for the upcoming period. At the same time, InvestingPro’s Fair Value analysis indicates the stock may be undervalued at current levels.
Firm view on competitive dynamics
Mizuho said Jack In The Box may be ill-equipped to sustain a prolonged price war given the strain on profitability for both company-owned restaurants and franchisees. The firm also flagged that the risk to the company’s fiscal 2026 same-store sales guidance - spanning negative 1.0% to positive 1.0% - remains elevated.
The analyst firm said investors should look for evidence of a sustainable recovery to low-single-digit same-store sales growth and for positive unit growth before underwriting long-term expectations of flat to low single-digit revenue and low- to mid-single-digit EBITDA growth. By contrast, peers are expected to achieve mid-single-digit-plus EBITDA growth, according to the firm’s comparative view.
Corporate governance and shareholder dynamics
Goldman Sachs maintained a Sell rating on the stock with a $17.00 price target following the quarterly results. Separately, Biglari Capital Corp., which holds a 9.86% stake in Jack In The Box, has requested shareholders vote against the re-election of Chairman David Goebel at the upcoming annual meeting. The company is urging shareholders to support all 10 of its director nominees and noted that Institutional Shareholder Services recommended voting for the company’s slate. These developments occur amid an ongoing proxy contest between the company and Biglari Capital.
Clear summary
Mizuho trimmed its price target on Jack In The Box to $18 from $20 while keeping a Neutral rating, citing weak first-quarter results, a lack of same-store sales recovery, constrained unit growth and margin pressure. The chain missed revenue and adjusted EPS expectations in fiscal Q1 2026, and governance tensions with a large shareholder add to near-term uncertainty.
Key points
- Mizuho reduced the price target to $18 from $20 and maintained a Neutral rating.
- Fiscal Q1 2026 results included a 6.7% drop in same-store sales, $349.5 million in revenue versus a $374.31 million consensus, and $1.00 adjusted EPS versus a $1.15 expectation.
- Company guidance shows company-owned unit-level margins of 17-18% for fiscal 2026 versus 26.2% in fiscal 2019; revenue declined 0.76% year-over-year.
Risks and uncertainties
- Elevated risk to fiscal 2026 same-store sales guidance, which ranges from -1.0% to +1.0% - impacts restaurant operators and restaurant-sector investors.
- Prolonged pricing competition could further pressure company-owned and franchisee profitability, increasing downside risk for foodservice margin recovery.
- Ongoing proxy contest and shareholder activism introduce governance uncertainty that may affect strategic decision-making and investor sentiment.
Note: This article reflects the data and statements provided in company results and analyst commentary and does not add new factual claims beyond those items.